Dream home or smart rent

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Transcript

00:00Hi guys, welcome to Nazariya ki Nagariya. Today we will answer the biggest existential

00:11question of ours. Renting or buying? What should you do? If you want to live in a house

00:19worth 2 crores, then there are two ways. Either you rent it or buy it. Let's see which is

00:26the better option. In India, the rental yield is around 3%. That means you will have to

00:31pay around 7-7.5 lakhs per year. That is 60,000 per month. In 60,000, you can live in a house

00:38worth 2 crores. Without any property tax or maintenance expenses. Now, if you want to

00:46buy this house, you will have to make a down payment of 30-40 lakhs. Because most of the

00:52banks take 70-75% of the loan. And in this 1.4 crore loan, you will have to pay 8-9%

01:00interest rate. For a 20-year loan, your EMI will be about 1,20,000 rupees. That is double

01:08of the rent. On top of that, 1-2 lakhs of maintenance, property tax etc. So, the rent

01:13is 60,000 and the EMI is more than 1,20,000. That means in renting, you have to save money

01:22to invest in stock markets or somewhere else. Which will become a huge corporate in 20 years.

01:27On top of that, renting looks great for people who have transferable choice. With this comparison,

01:32it seems like you should not buy this house. But the picture is yet to come, my friend.

01:37Rent increases by 6-8% every year. That means the house whose rent is 60,000 this year,

01:43in the next 10 years, it will be 1,20,000. Whereas, the EMI remains the same in the entire

01:49year. And as soon as the tenure ends, the house is yours. The house is also a permanent

01:54asset which provides you security and long-term stability. On top of that, real estate prices

02:01also increase. Although, in metro cities, it does not increase that much. But in tier-2

02:06cities, it is very beneficial. And stocks and mutual funds can also give you good returns.

02:11But when it comes to taking a loan, the house can be used as a bank leverage. On top of that,

02:17in India, owning your own house is considered a status symbol and a milestone in your life.

02:24So friends, this was our discussion on renting versus owning a house. The decision is yours,

02:30but it is important that you take care of your current situation and future goals while making

02:36this decision. Do you live on rent or is it your own house? Do let us know in the comments.

02:41And if you found this video informative, then like it, share it, and don't forget to subscribe

02:46to our channel. I'm Sanaka and I'll see you next time.