Is Renting A Home A Wise Decision?

Written by Suresh Sadagopan

If one wants to avoid getting entangled in the emotional aspects of real estate investing & make financially sound decisions , it is imperative that these real estate myths be recognised & dismissed. In this info-bite, we will debunk a fondly held myth in respect of property investment.

This is a carefully nurtured propaganda, especially by women, who are staunch advocates of own homes. A landlord having a home wants a good tenant. Having found one, he is not going to ask the person to move on, after just 11 months. It just does not make any sense – the landlord must be an absolute chump to do it.

If he does, he needs to find another good tenant. This will result in cash-flow uncertainties due to vacancy periods for the home after a tenant vacates, brokerage payments, repairs and painting before the next tenant occupies etc.. So, for a good tenant, the house is generally available for several 11 month periods, blowing the propaganda to smithereens.

The other received wisdom is that it is difficult to stay on rent if one has school going children. Again, it hardly has any substance. Even if one needs to shift from one home, one can mostly find another home in the same building/ society. If not, one can find in the nearby buildings, next street/ vicinity. One may just have to hire the services of a broker for this, to get the right home.

The other nuisance is shifting homes. Packers and movers will be able to help here.

So while renting, there will also be a brokerage & charges to pay for packers/movers. But considering all these costs too, renting homes would still be economical

There is a pain in shifting, even if packers and movers are involved. It takes time to setup the home. Also, one will need to change addresses ( this is becoming less of an issue today as communication is mostly electronic, making postal address largely redundant ) in many places. These are certainly the downsides of renting.

But, there is another upside to renting, which is not appreciated. If one needs a bigger home, it is far easier to move into one, rather than buying one. Also, if better homes, with better amenities & ambience comes up, one can simply move there. A person who has bought a home is the one stuck with it.