Myth vs fact: Buying a house is better than renting out
1 min read . Updated: 16 Jul 2018, 11:49 PM ISTYour wish of living independently in a dream house can be fulfilled without the burden of a home loan if you simply rent out the house you like
Living independently in one’s dream house is everyone’s wish. But sky high property prices have always been a deterrent in fulfilling this wish for many. Yet this wish can be fulfilled without the burden of a home loan if you simply rent out the house you like.
For example, you could rent a one-bedroom/hall/kitchen apartment worth ₹ 1 crore in a distant Mumbai suburb for a monthly rent of ₹ 20,000 to ₹ 25,000 which comes to just 2.5-3% per annum of the property value. The rent seems quite affordable in such a scenario. If the same apartment were to be bought, one needs to initially arrange the down payment of ₹ 20-25 lakh and pay an equated monthly instalment (EMI) of ₹ 75,000 for a home loan taken for 15 years at a rate of 8.5% per annum.
Think again and make the right decision. A change of mindset can help you fulfil your wish.
—Kalpesh Ashar, founder, Full Circle Financial Planners and Advisors
Click here to read the Mint ePapermint is now on Telegram. Join mint channel in your Telegram and stay updated
