I have always been a staunch supporter of renting. And I was very logical about that. And my simple contention of renting vs buying a home was that the monthly EMI will be at-least three times higher than the monthly rent you pay. Adding to that, instead of owning a real estate you can invest the surplus money (after you pay rent) you got into equity. Equity will beat real estate in long term.

But beyond logic and finance , a universal thought pervades inside me; debt is an unnecessary stress inducing element. Avoid it wherever possible.

Having said that, it is foolish to imagine people logically weighing options to buy or rent. Most of the rent payers do so simply because they don’t have the money neither the income to service debt. Most of the people buy a home driven by emotions. Some have surplus money and are very sure about their future cash-flows.

But again, beyond logic and finance, buying or renting is simply a choice. People who buy a home want to anchor themselves at one place. They are driven by emotions of owning their own home, decorating it to their taste and calling it their own.

But hear this, the reality of real estate is that people rent from those who buy. If there are no buyers there would be no renters. If everyone wants to rent then the builders who build homes don’t really have a business case for building homes. Builders take the risk to build homes in a hope that they would liquidate them for immediate returns.

The bottom-line: Buy or rent a home? it really doesn’t matter. It depends.