Background
I have been born confused about which of the above is right from me from financial standpoint. Have asked most of the astrologers I could get appointment from, financial pundits, my kids and am still spinning. Below is where I am and what I think may be you could contribute.
I have been born confused about which of the above is right from me from financial standpoint. Have asked most of the astrologers I could get appointment from, financial pundits, my kids and am still spinning. Below is where I am and what I think may be you could contribute.
Buying is great if one have easy access to funds to close
the deal and can afford to keep it like that for a while as suggested that
investments could go up or down, I mean without constraining your lifestyle or
compromising your current expenditure in any way. This in other words means
that if a bank loan is availed, there needs to be sufficient provision for the
EMI monthly payment without having to raise one’s Blood Pressure or
compromising on biweekly family parties, or selling your sports car and may be
dig in deep for long given current real estate scenario example in India where
prices have depreciated by almost 25% from 2012 peak Real Estate in Gurgaon, Noida,
Bangalore, Pune, Delhi and Mumbai. Property cycle typically rotates every 7 to
10 years with 7 or less (IF you are lucky) in under developed countries like
India where GDP growth rate is in the range of 5% and 10+ years for countries
with GDP in the range of 2%. GDP directly create employment, demand of
products, improves lifestyle and eventually demand for property.
Renting is great for one if there is no surety or access to
funds. Rent ideally hovers around 5% of current capital price of the property
per year. Example a 3BHK Gurgaon Apartment of 1863 Sq. costing around 2Crores in Vipul
Orhid Garden in Sun city Or Vipul Belmonte should have 2Lacs EMI (Interest
only) monthly with bank interest at 12% and one could rent the same apartment
at 40K without breaking a sweat. This simply means a monthly saving of 1.6Lacs
upfront which needs to be counted against possible property capital
appreciation in long term ex Selling the same apartment after 2 years at
2.5Crores.
Now go figure, which is better. Buying or Renting!
Feel free to ask any query or leave your valuable feedback on this blog.
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