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Home My Story Awareness Renting vs Buying ... The myths and facts

Renting vs Buying ... The myths and facts

Author: Mr. Q

Recently I see a lot of discussions on ‘Renting vs Buying’ a house. A lot of people act quite smart and point out that for the same amount that we repay as loan when buying a house, we can live in a more comfortable place for the same cost when we rent. That is indeed correct but this is just how we are today. We look into only the tip of the iceberg and not the whole picture. Buying a house and renting a house are two different things. Buying a house is an investment while selling a house is just an expense.

Financial awareness is great. People talking about investments is good but it’s better to know nothing rather than know a little and fill up the rest using assumptions. Buying a house is never a bad investment. Even if you ignore the emotion attached with owning a house, the perks of renting stop at the point where your active income stops. Let’s face it, we are not going to be earning forever and we are fast moving to a culture where we kids don’t necessarily take care of their parents.

We have a lot of arguments against buying. People say that a job is no more in one fixed location and that people keep moving from one place to another for a different job but riddle me this. What percentage of the population are in this kind of a situation? People want stability once they settle down and start a family. The first thing they need when they talk about stability is a house. Priorities have changed in the last few years but reality hasn’t and that is a fact.

Buying a house should always be a part of your agenda. Not that I am cynical about kids caring for parents but I’m just talking about what is happening. Rent is always going to be a major expense and you cannot move to a smaller place when you retire. Even if you don’t plan on living a long life, rental expense will be a major part your budget. Once active income stops, you don’t have much to cover that expense. Breaking your long term investments at that point is not as safe as you think.

I’m not advising everyone to buy a house. I’m not asking you to own multiple houses but when you retire, you are better off owning a house in a location of your choice. All our investment plans should include a portion of our life where we are retired. Unless we realize the gravity of the situation, we can keep spending in the present only to come to a situation where we will be left in a fix regarding the biggest expense we will face at that point in time.

(In Association with


RentingBuyingHouseProperty PurchaseFinancial Planning