Why is EMI better than Rent?

EMI better than Rent

To buy a home or to stay on rent? This is often the question that lingers in the minds of many of us. Though paying the EMI for the home loan as a home owner and paying the rent as tenant both involves shelling out money on a monthly basis there are definitely many advantages on Choosing EMI over Rent

EMI, an Investment – Rent, an Expense

When You avail a home loan and pay the monthly EMI you are actually making an investment and building an asset for lifetime. The EMI goes to build your equity over time and you eventually become an owner of the asset which in turn would generate you income and also yield a good ROI. On the other hand, Rent is merely an expense, money lost  which doesn’t contribute to your financial stability in any manner. 

Better Stability –

Your Home loan EMIs are predictable and known entities, so you would know exactly how much you need to allocate every month to meet it. This helps in long term financial planning and managing expenses better. However, rent is a variable figure, and with rental costs on the rise in most part of the city, one encounters financial instability as a tenant. Since most of the rental agreements stand for 11 months or  a little more long term planning of finances becomes a challenge. The fear of sudden increase in rent is always a factor that looms large when staying on rent. 

Apart from financial instability staying on rent also brings in an uncertainty, the occupancy of the property. Once the rental period on the agreement is over there is always the fear of the home owner asking to vacate the property. To prevent the disruption of the job, and the education of the kids, one is forced to look for house on rent in the same locality and even settle for a higher rent. There is always this fear of dislocation when it comes to staying on rent. 

Better Savings – 

The principal portion of the EMI paid by the home buyer for the year is eligible to be considered as a deduction under Section 80C.  As a first-time home buyer one can also avail deduction for stamp duty and registration charges under Section 80C within an overall limit of Rs 1.5 lakh. Home buyer is also eligible for deduction of upto Rs 50,000 under Section 80EE. With the RBI slashing the home loan interest rates due to the pandemic and affordable home loans available to both salaried and self-employed individuals, availing home loan to own a house and enjoying the tax benefits is a prudent financial decision. In contrary to these rent is merely an expense which doesn’t bring in any savings in any form.

Sense of Security & Stability – 

Your EMIs are building an asset for you and the generations to come. Careful financial planning helps you develop the base to pay your down payment and affordable EMIs also helps you develop financial discipline.  Buying your dream home is an important milestone and with careful planning, saving and choosing the right property that has good potential for appreciation like the flats for sale in OMR, Chennai, you would be a proud owner of an asset that would offer you financial stability, earn you returns in the form of rent, appreciate and yield great ROI and help you create happy memories for your lifetime.  

In more than one way EMI is definitely a smart expense, one that earns for you in the longer run and gives you better financial stability, an asset for generations to enjoy and reaps excellent ROI especially when it is located in thriving parts of the city like the apartments in OMR. Beyond all the material benefits, Living in your own home gives you the freedom to live on your terms, and creates happy memories for a lifetime.