While people often discuss the rising property rates in Mumbai, it is also true that rental rates in Mumbai are not getting any cheaper. This brings us to the important question that most prospective home buyers think about—is it better to purchase apartments in Mumbai or simply continue to pay rent year on year?
A few facts about rented apartments
True, renting an apartment doesn’t put a burden on your monthly finances. But this is a short-term truth. You continue to pay rent month after month for several years. But at the end of it, you have no ownership in the property, nor does your rent qualify as investment. All you can do is show your rent amount in your annual income tax documents to get measly benefits. Whether it is repairs or maintenance, you continue to spend on your rented home as you would on your own home.
Renting a home is fine from the short term if you are just starting out with your career or business. However, when you have a family, investing in an asset automatically becomes your financial safety backup plan.
Buying apartments in Mumbai
Buying an apartment, especially in a city like Mumbai, is certainly a major financial decision. But experts suggest that it is always better to purchase a home, and purchase it as soon as you can afford it. For instance, if you belong to the upper middle class and are living in a reasonably up-market area in Mumbai, you are likely paying anywhere between INR 30,000 to INR 80,000 per month as rent.
Now, what if you were to buy your home? You could easily use a part of your savings to pay the booking amount which is usually up to 20% to 25% of the sale price of the apartment. You could easily arrange for the remaining cash by means of a home loan and fix your EMI. In this scenario, you pay the EMI akin to your rent for say 15-20 years. And once the loan has been repaid, you entirely stop making payments and the house is yours to enjoy for a lifetime!
Using a bank loan to ease your home buying process
People with a good credit rating with their bank usually have no problem in availing home loan to buy apartments in Mumbai. A tip here would be to make the maximum possible down payment that you can, as it will reduce your EMI burden at a later stage. All you need to worry about at a later stage would be property tax, monthly maintenance, and other miscellaneous expenses that you would incur on your home.
There is no dearth of new apartments in Mumbai that you can select from. There are new apartments in Mumbai to suit every budget and every pocket.
Renting versus Buying Apartments in Mumbai