Rent or Buy? Which Option Makes Sense for You?

If you are the individual who is weighing the option of buying or renting a house, you need to consider a few factors. Your financial situation has to be assessed for your long-term planning and that it is not that simple as well.

Understanding your house budget and expenses

It is wise to review your household budget in comparison to the expenses before you begin looking for a new house. You have to find out how much can you afford to pay for accommodation without putting a burden on the budget.

You simply cannot go for rent or mortgage payments if you are unable to pay them on time. Several factors are involved both for renting or buying that should be considered prior to making a decision.

What are the requirements while renting or buying a house?

Your credit history and credit score are crucial and that they will be looked upon by the rental agency or the landlords for the mortgage or rent. You will be checked whether you are can pay the bills on time and are not overdue with the loans or the credit card balances. You have to check your score and credit history before applying for the apartment or the mortgage.

Other factors that are important include your strong employment history, W-2 forms and current bank statements that have to depict a good picture. A few rental agencies require professional or personal references as well as background check and contact information from the previous landlord respectively.

When is renting a viable option?

If you have uncertain employment: According to Evelyn Zohlen (financial planner), if you are unsure about your living paycheck and job situation, it is best to save money for the future living expenses. This will help you to build an emergency fund for you as well.

Limited funds: Renting is the better alternative when you do not have enough money for making the down payment or for managing the additional costs of owning the house.

Short time frame: If you have an assignment that lasts two years or you plan to move abroad in a couple of years, then renting a house is a better option.

When is purchasing a house a feasible option?

Buying a house only makes sense when you have the ability to cover the additional costs for owning a house. It is vital that you pay the closing costs and the down payment before you buy a house. It is seen that many banks receive a 20 percent down payment. This means for a house that costs 250,000 dollars, at 20 percent the down payment will be 50,000 dollars. So, the total amount includes percent in commission and another one percent in closing cost as well.

But if you have much debt, you should not put your savings for the down payment at all. It will be better to pay off the entire debt first until you get a better financial position for yourself. If there is no debt, then you need to work out the buying or renting options in detail.

Why Is Bangalore a Favorite Realty Destination?

The Bangalore real estate market is one of the most promising real estate markets in the country. IT companies have played a major role in the growth of the real estate market.

The city is one of the most livable cities with good physical and social infrastructure facilities, best educational institutions, famous hospitals, shopping malls, retail outlets, nightlife, etc. The city with all these facilities and attractive climate have attracted a number of people. The residential market has seen excellent growth over time. Many micro markets are known for the residential purpose and few promising and attractive markets include, Sarjapur Road, Whitefield, Outer Ring Road (ORR) and North Bangalore.

Sarjapur Road:

The micro market is located in the South-East of the city. The area is connected to the prime IT hubs like Electronic City, Whitefield and Marathahalli. The area is known for the international schools and reputed colleges. The area has various options for shopping like malls and stand-alone retail outlets of international brands. The micro market enjoys a good hospitality sector and good healthcare facilities. The locality is favorite among the IT/ITes employees as it is well connected to the IT regions. The locality is known for affordable housing. The micro market also has villas and row houses. If you are looking for villas in Bangalore for sale, then you can consider this locality. The locality has good growth potential and is expected to give good returns over the years. Infrastructure projects like the proposed Central Silk Board – Hebbal line metro will benefit this area as this will link the locality. The commercial market in the area is very active and Infosys is coming up with a large campus on Sarjapur Road.

Whitefield:

Surrounded by important micro markets like Mahadevapura, Marathahalli, Bellandur and Krishnaraja Puram. Whitefield is one of the most sought after residential locality after the invention of the IT sector in the area. The locality is seeing demand for the high-end residential apartments and for the villa projects. The area is seeing good demand for the mid-income housing and the demand is mainly driven by the IT population. The micro market enjoys good social infrastructure and the locality is seeing good developments in physical infrastructure as well. This is one of the major reason which is pushing the demand for the luxury projects. Infrastructure developments like the proposed roads, proposed phase II of the metro rail, etc. further boost the realty value of the region. The area is also seeing developments in the commercial market of the locality with the proposed malls like Virginia mall, Embassy mall, etc.

Realtors Need a Unique Success Mantra

The real estate demand has reached around 1.35 billion square feet by 2020 in India. This is said to be up from around 900 million square feet currently. Out of the total numbers around 85% will be for the residential properties in India.

According to the reports, the sale of residential properties have slowed down due to low demands by customers at the current rates. This is leading to an inventory overhang is metropolitan and other major cities. Due to this slowdown, the builders have increased the discounts and are offering attractive offers so that there is some improvement that is seen in the condition of residential properties in India. However, the developers as well as the real estate sector needs to do something very differently to achieve success in this sector.

There has been a change in the real estate model and this will change more often and continuously and at a more rapid speed. However, the developers need to find the ways that these changing scenario can be a profitable one for them as well as the buyers. The builders are not able to understand this changing scenario and how should they cope-up with these changes. Once they get a hand on experience about these changing scenarios, definitely, there is no looking back for the residential properties in India.

Traditionally the charges that were attributable to the real estate firm was in managing approvals, land acquisition and agglomeration. However, now people are constructing sustainable, concrete business and value creating industries around very good process managed real estate along with very good execution skills. These definitely are the ways one can be successful in this changing scenario of the real estate in India and with this the developers need to understand and cater to the demands to the buyers so that they do not hesitate in buying their dream home. Thus, the real estate firms needs to upgrade themselves with the changing environment and reach new heights.

There will be financial protection for the home buyers whose projects do not complete on time. Any delay in the construction will provide benefits to the buyers. The buyers are allowed to claim for tax benefits of Rs 2 lakhs after possession if they invest in any under-construction building and it does not complete within 3 years. However, there will be a reduction of 30,000 if the builder delays the construction beyond the limit and thus they will have to pay higher interest. Also, the first-time buyers have to pay additional rent if they are buying homes for self-use.