I would rather rent a home all my life than build or buy one!

Now the market is rising steadily. Flats which were sold at Rs.9000 per sft. is not sold at Rs.12000 sft. If you have surplus money it is advisable to invest in land or house/flat and use after some years in case it is sold you will get higher amount.

JER616: I have borrowed home loans twice and survived the ignominy of becoming a defaulter. First I borrowed for constructing my house in 2003. After paying their equated monthly installments for three years, when I wanted to short close the loan, I realized the principal amount of borrowing was just intact at the level of my borrowing. . Yet, I decide to close the account because my employer was giving some additional funding. Today, I'm free of all debt on that house. I wanted to invest my voluntary retirement benefits in real estate [the idea was to buy a good apartment block with required loan, sell the house which is free from debt and square off the loan borrowed for the apartment block]. The borrowing was & EMI were quite high. I could not get a good price for my house, so I was unable to sell at all. The EMI started becoming a big burden. In the meanwhile, there was a total slump in housing market, rates were going up, expected rentals were coming down & it made me realize, there is no economic sense carrying a huge debt/EMI. I decided & was lucky to have come out unscathed the second time, as I could sell the apartment too. This time again, I ended up paying all the amount borrowed after years of repaying to the bank. All the repayment was allocated to interest. . I will now be quite cautious and plan my finances well & if I can retain my first house fine, else, I will live my life in rented houses!

ravisivan: good to see you in your original photo! I held on to one apartment for several years in the hope of getting good return/appreciation but it never came about. I have already put in my VRS money in one good site. At this point of time, I will probably adopt a wait & watch policy!

Hi ene: The pain of having to shell down thousands every month on rent, especially when earnings are not stable can be quite bothering. I am not sure if the practice of collecting an advance of 10 months' rent equivalent prevails in your country as well. It is also a big challenge mobilizing such huge amount, which the owner keeps for earning interest at tenant's expense. But let me tell you the costs of building material and construction labor are no less either. And you will be fortunate if the builder doesn't drain money which you borrow with great difficulty. yea, every contributing their share is certainly a good collective thought. Building or buying a house is a big desire for most people. Just that the economics are highly unfavorable. My sincere good wishes for you in either case.

We have same point of view enelym, I feel right now what you feel before. Renting is really tiring. All Filipino always dreaming to have a Good house and lot. Which is I'm doing my best and work hard for it. That one day we can have our own home. But, still your lucky, because your family have bought two lands before and currently built it,right now. But us still need to provide lands and build a home. We need to save more for many years before we can have own. So my mother and us will finally feel stable life. Push would rather to rent than to have own because the cost of living in India maybe is a quite expensive for him.

@push, I see now that there are different factors to be considered in different countries. Here the rent is expensive too especially if the house that you've chosen is newly built or looks good. That huge amount of paying 10 month's advance rent will really give you a headache. In my country, the owners of the house we rented before asked us 2 months advance and deposit. So I think it's a little okay to rent here. What about buying an already built house and lot? Would that be so expensive too? I think that will cost millions? If that is, whew that will need to take years to earn such amount. @bashabasha, Yes it is tiring and gave us a some stress too, when we experienced living in a place owned by my mom's friend. She's in US and her sister is the one collecting the pay. The sister of my mom's friend is so annoying and can't wait for our payment. There was a time that we have paid late for 1 or 2 days only because of the delayed salary too, and she started gossiping us to our neighbor, the neighbor told us about this. That's why we really force ourselves to have our own house and lot, so that no one can do such thing to us. I do hope that you can get yours too, it's the only way we can feel stable here in our country.

Thank you. :) Hey, but the first house is never the last one. :) It is only to save that rent. The last one is something you build around your retirement. It has all that you want and you know about. Proceeds from the first house get rolled over into this unless you are sentimental about it. I agree with the EMI and c/w of the house. But even so, I hardly have to maintain that flat. I bought it for approximately 2.5 lakhs and today it may be around five times that. So capital appreciation wise, it has done a splendid job without me having to pay any taxes. What more, metro liner is now coming up in the vicinity, so I am told it will double if not triple in the next couple of years. I took my flat in 1990s (1994). I took a home loan on which I paid interest at the rate of 15.5 percent per annum. Compared to that era, the present period seems like a cake walk to me, even though I borrowed almost 14 times more than what I borrowed for the first home. I think borrowing as long as possible is good. It makes me more disciplined. I would be debt free in about four to five years from now. :) As to rent, 6000 pm is what I get on initial investment. :) That is substantially high. Dont you think? And I do have a utility room downstairs. I have placed a whole lot of things that I dont use in that. I have been offered 2000 pm for that but I am not willing. Flats in posh localities, however, do not fetch much rent. They are vacated more often. A lot has to be spent on them because those who come to stay in such homes require certain style. They remain vacant for longer. Eventually the rent that is received is not comparable. Dad bought this flat for approximately 27 lakhs about 8 years after I bought my flat. If we were to let it out it would fetch us approximately 16500 pm. Economics ..this does not work as well. Right? Locality matters. Capital appreciation is also not much merely double may be.

By the way, my maid is paying 2500+ power and water charges for a single room, which is approximately 14 by 12, and an attached bath.

Honestly [the title of this post for stimulating discussions notwithstanding] I see merit in the approach of using what would otherwise be saved as rent, to pay for EMI towards loan. Plus the added benefit of IT reliefs. In fact, that's what I have been able to do. More or less the kind of plans you have set for yourself! I am debt free, after making a reasonably valuable home on which I can earn by reverse mortgage and right now, I'm earning rent too! Having said that, after I consciously chose to live in rented places leaving my own home to, first relatives and then for rent, that choosing a rented house gives me options which I could not foresee or build in my home. That's of course, smaller. The bigger issue is, the whole equation which made sense in the 70s & 80s has become haywire. Costs are high and so are loan requirements and corresponding EMI. The expected rents are quite low & disproportionate to EMI. There is always some or the other recurring expenditure in c/w the house. Considering what I just pointed out above, I thought of proposing this topic to see different perspectives. There have been some very good views, including this one by you.

I do understand your point. But I still prefer to have a house that I can call mine. In a rented house, I can't make any structural changes. Even if I don't like the design or the way they separate the rooms, etc there is nothing I can do about it, except live with it. True, if you have a good landlord, it is almost as if you are living in your own home - like I do now. My landlord rarely comes, even when he comes, he does not complain about anything. He is the most easygoing landlord that I have ever known. Still, it is his house and I have to keep it as he likes it. At the end of the day, all the money I have paid him over 6 years, I could buy an apartment or a plot in some other area.

Follow your dreams! Yeah, these are points of view based on each one's perceptions. Wishing everything falls into place as you implement your plan.

After the US sub prime crisis which pushed their economy almost to the brink of collapse, several countries felt the repercussions and governments started getting alert. Though India also experienced real estate boom for some time and banks were chasing people with loans, the extent of bad loans for Indian banks was far less. Even then, RBI brought several restrictions on lending by banks to housing sector and banks have become very very safe & selective. In my knowledge they only approve loans as exceptions. Please don't get me wrong-I'm not discouraging you or dampening your enthusiasm but it helps to be informed well. Please weigh all options carefully and tread with everything charted very clearly. A strange notion implanted in every one of us is that money paid as rent is going waste. It is not; if you have a considerate landlord and a good house that is to your liking, you are enjoying large part of your life in those houses. Paying for living well is not a waste of money! But I am not sticking my neck out here! I am also noting for my understanding how different people view things. Thanks for commenting.

I see both sides to this discussion – good discussion by the way. Suppose all the decision just depends on the market swings.? The idea of buying for the purpose of rental income or another way, turning over a property, if it does not have the advantage it once had will resist being a lucrative market. From a personal perspective, the first home buyer or builder too might want to look at all the costs before taking a leap. Financing to the limit is dangerous and prices for everything are ridiculous now. I get the two sides, rent is not throwing money away, it is our life but also it is too bad that money goes into someone else’s pocket. The banks and lawyers stay in business. My story is I bought a fixer upper that didn’t cost very much and sold it privately over time for more than I paid for it then bought another without a mortgage. It was only a log cabin in the wilderness but it was mine. Now I am in the city and pay enormous rent, life changes.

Its a good move to have liquidated your debt. Nothing more reassuring than a debt free living as sooner in life as one can manage. That was my biggest emphasis and I'm happy today to have cleared all loans. . Now I know I have to cut my coat according to my cloth.

Yes. Cost of houses is high and under the circumstances it is convenient to stay in rented houses.

that's what i want to say.i don't want sth.to bother myself enjoying the life

madylee: That's quite my view: one should not part most of the earnings for something over which the full ownership can only be enjoyed almost after old age. By then, we would have deprived ourselves & the family of all simple entertainment & enjoyment. Let those who are blessed with big money build houses. We should be content paying for it to the extent we live. Gone are the days when people would think instead of paying rent, you pay for loan installment to get a property one day in one's name. The equation doesn't hold, at least as I perceive it.

lisa: I wish there will be better times and reasonable finances that may help you make a modest house-rented or owned. Why not wish that you will get a landlord who is very considerate and kind and makes you feel as if you were living in your own home? I don't see it as an impossibility. But honestly, if you have a dream of having a house of your own, I wish you follow your dream-and succeed!

I wouldn't suggest a loan if I were your friend, even if some one offered to lend. Unless you are extremely clear in your mind that it is a sound economic judgment. Enjoy the living while there is someone taking care of the condition of their asset. . Having said that, just to recount some of the responses here, it would seem if you were in your early stage of career and you earn handsomely, you might think it was logical to own an asset now while paying its cost through loan installments leisurely!

I am willing to take the point that it is relative, probably yes. What I was suggesting though is that if market conditions are such that rentals are preferred both by landlords & tenants and there is a peaceful living for reasonably long periods, rentals are not a bad idea in contrast.

ravisivan: I don't disagree with the conventional wisdom completely-that deployment of the same amounts of money that we incur on rent could actually help us create an asset if we view the monthly payments as investments for a good asset. I only wish owning a house should be a comfortable proposition.

Alebelt: I have. Perhaps my children will inherit my wisdom rather than my estate!. Just making it a bit light. Yeah, may be that will be an expectation. But I also find that many present generation children do want to & will probably create their own!

Pushhyarag2000...You are right the down cycle can be longer than average and we never know. I do think there are times and reasons/circumstances that it is wiser to not buy a house...

Hi stary1: with world economies integrated in some way and far more vulnerable to changes happening in one other, the situation more or less is the same in my country-the difference is in degree. You brought up that good point about the cyclical nature of housing market. Those that get caught in the down side for a little longer when hit by any more economic stress, living with defaulted dues sounds nightmare. If things go favorable in terms of timing etc, then of course, building equity proves worth.

I have no problem in acknowledging your argument or suggestion. Except for the fact that economic policies must support people with appropriate incentives so that it does not become a burden. My only suggestion would be to watch the monthly mortgage rates and the final cost you are going to incur on your dream house. More often than not people overspend and end up looking for additional finance.

I would say the loan size as well have been managed prudently if the EMI is lower than the rent you had to pay. May be people should follow this principle of containing their loan limit. In many cases though, people find it difficult to honor the EMI or have to struggle to manage it. Good to hear.

If only the economic & market situation turns favorable with boost for housing and interest rates come down to levels that would make earnings from a new house near equal or slightly higher than the monthly payouts, I may re-think; otherwise, I am much rather happy not committing both a big down payment, monthly repayments, insurance risk cover costs, maintenance & taxes on property. I am better off managing a modest home with monthly rentals.

I would do a sizable down payment with small sized monthly payments not in the case of property buying but if I were buying lets say a good car. I would look at as an overall economic decision. The major problem at the moment is total slump in housing market with everything unfavorable. And we don't see any signs of return of boom times. I am happy you listed the advantages of renting. Lets say I have a huge wish list of items to be incorporated in the house but my budget forbids it. If I'm choosing rental option, I get that flexibility of looking at several houses before I settle for one. I also agree personal preferences do play a significant role.

Owning a home is everyone's dream, no doubt lupeng. But the whole economics right now in my country or for that in most countries after the collapse of the US housing market boom is pretty unfavorable for buying a home. If only there is a comparable cost benefit advantage supported by low interest rates, no collateral for loan and reasonable return from investment, then it is worth the while. Otherwise, I will move from one rented house to another after every few years. So what?