Benefits of owning a Home

Owning property or home as an asset class is a deep-rooted sentiment among Indians. Traditionally, it is seen that property has an aspirational and emotional value and it is either inherited or invested up. And identifies with safety, and security in one’s investment portfolio. The trend among the young population, for the past couple of years, has been to scout for rentals, owning to better job opportunities spread across locations.

Post Covid-19 we however see a change in the mindset of even youth, as the pandemic has reiterated the need for security, safety, and stability in one’s life. This brings us to highlight the benefits of owning a home:

Diversifying Asset portfolio: There is a saying that doesn’t put your eggs in one basket. Therefore, whatever the juncture we are in while we are building our assets, only investing in the market (stock shares) or gold is not a smart thing to do. Traditionally we see that the market is always volatile and influenced to extremes by external and internal policies. Therefore, it is always good to own a property to help diversify our investments.
Avoiding renting hassle and cost: Renting a property always has binding terms and conditions. In a few metros lease renewal is every 11 months with a 5% to 10 % hike built in. There is no guarantee of renewal as the landlord may request to vacate as per their requirements. In addition, there are some cities where the norm is around 5 to 6 months of rent that is to be paid in advance, the rent agreements need to be registered with the society, and police verification is done. Add to it the cost of moving in and out. Now imagine doing this every 11 months. Every one of us must have been frustrated by this constant hopping from one apartment to another and then start adjusting from point zero.Owning a property makes all these pain points null and void.
Freedom, Security, and Exercising choice: There are multiple options for owning a home - ready to move in, under construction, or a plot and construct as per requirement. Each of these choices has its own benefits and has benchmark requirements in terms of finance and documentation.However, the advantage is the same across. Given the property shall be owned it gives one the choice to settle in for, size, locality, and amenities as per one’s own requirement. In addition, given the space is owned one can remodel, renovate or expand and use the space as per one’s requirement and taste without any preconditions or dependency on permission as is the case with rentals.
Lucrative, due to financing options and Tax Benefits: All home buyers must have done this calculation at least once in their lifetime, trying to figure out if renting is a smart choice, or owning a home is! And most of us have realized that even though our monthly outflow is less in rentals the overall picture of owing a house is more profitable, because at the end of the month as we pay out our EMI towards homes, we are creating a scenario where we create ownership, whereas in rental we are just putting in our hard-earned money into someone else’s kitty.In addition, when we are paying an EMI for buying a home, we will also get income taxbenefits on interest and principal paid during the financial year,as a taxpayer. Not to mention that the value of property always appreciates owing to the development of localities and geographies making this a very lucrative option.

All in all the benefits of owning a home outweighs the choice of rental, purely from the stability and security of having a place to call home. And in scenarios where a pandemic can cause disruptions that have not been envisioned earlier, we see many of the urban population tilting towards the option of owning a home.

Conclusion

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