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Renting or Purchasing - know better to save better

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March 11, 2019

Wealth creation is a lifelong ideal that requires certain fixated decision making and concrete planning. Among the various factors that may influence your decision making when t comes to investment steps, the factor of renting or buying comes often to the fore.  In India, traditionally, ownership has been considered to be a better deal than renting or leasing. This is because the factor of market-based ownership of any kind assumes a special significance in the traditional Indian set up. In Indian set up, owning an asset e.g. movable or immovable property has been considered as a step towards market-leverage. However, in the present age, where the cessation and depreciation factors define the market indices, this may not longer hold true. Renting an asset (e.g. a residential property) has many advantages over purchasing one. Following factors make the distinction more clear:

  1. The absence of any additional maintenance costs:

    When you rent a property, you enter into an agreement that does not require you to pay any sort of additional maintenance costs or any further payments. Ownership requires you to ensure that repairing costs and furnishing bills are paid by the due time. However, renting a property is entirely different from this scenario and you don’t have to pay either of these.

  2. Freedom from additional taxation:

    Owning a property makes it mandatory for you to pay additional property taxes and declare the income from owned property (in case of renting it out to other). However, if you rent the property, there are no such hassles and you enjoy the freedom from ownership-taxation.

  3. Direct access to amenities and facilities:

    If you own a landed asset, it becomes crucial for you to create the scope for basic and additional amenities. You have to spend a volumetric amount on basic repairs, starting the work for building basic amenities like water/electricity supply and also handle the expenses for additional facilities like parking, garage, pool, home-decorations etc. In this context, renting is easy on your pocket and you can enjoy the access to basic and additional amenities for a fixed amount of money. Therefore, you can enjoy the available facilities without having to worry about their pricing or any additional maintenance.

  4. Monthly scheduling of funds:

    When you pay the rent for any asset, you know the monthly schedule of the budgetary allocation and channeling of the funds involved. This means that there are no additional burdens on your pocket and you just have to pay a fixed monthly amount as a joint covering amount for all the basic or tertiary costs involved. This means that you can plan your budgetary allocations in a better manner.

The whole purpose of listing the details about the relative benefits of renting vis-à-vis the ownership is to highlight the manner in which you can safeguard your savings corpus from any unwanted burdens. HDFC Life offers numerous saving and investment plans that are aimed at growth of your funds and making your money work for you. For details, click on the mentioned link: https://www.hdfclife.com/savings-plans.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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