Buying a house. Exploring the option's pros and cons

Definitely, one of the biggest financial decisions in life for many is buying a home. From deciding on the perfect home to arranging for loans and finances, the process may seem long drawn and sometimes tedious.

The Pros
Ø Asset Creation
Buying a home is not just about owning concrete space. The money spent through down payment and EMIs actually go towards creating a valuable asset. When you rent a home, even after years of monthly rentals, you actually don"t get any asset in hand.

Ø The Investment Angle
Value of a home increases over time. Depending on the property prices and the demand in the neighborhood, you could generate considerable profit from your property if you decide to sell it at a later stage.

Ø No Landlord Issues
Pesky landlords could often be quite a pain for tenants. Owning your home means no interfering landlords and your freedom and privacy is guaranteed.

Ø The Emotional Aspect
There is definitely an emotional string attached to owning your own home. This is something that a rented home would not give you, especially for first time home buyers.

Disadvantages
Ø Question of Affordability
You should take the plunge of buying a home, only if you can afford to pay the down payment and service the monthly loan installments. With hikes in interest rates by the Reserve Bank of India recently, many borrowers are feeling the pinch. Also, a sudden financial crunch may sometimes cause havoc in payment of EMIs. Home rents are much lower than EMI payments. And if you are in financial crisis, all you need to do is move into a home with a lower rent.

Ø Returns and Timing the Market
It is true that real estate is an investment. But what one must remember is that real estate is cyclical. Your gains are greatly dependent on when you have made your purchase. Buying at the market peak, in the long run, net of all loan costs etc… may actually not fetch great returns. Also there exists a risk of the property not appreciating owing to reasons which really aren"t in your hands. If the market isn"t right to buy a house, renting serves as a better option.

Ø High Maintenance Costs
Most apartments and gated community properties these days possess additional expenses towards maintenance and amenities. You must consider such recurring costs in your budget before you plan on buying a home.

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Renting a house: Pros and cons again.
Evaluating between buying or renting a house" title="Should you buy a house or rent a house?
Renting a house: Pros and cons again.
Evaluating between buying or renting a house" />Should you buy a house or rent a house?
Renting a house: Pros and cons again.
Evaluating between buying or renting a house