When in NCR, Should You Rent An Apartment Or Buy A Home?

When India's young shift to the country's metros for work, finding a place to stay proves a key concern for them. While most of them start with renting apartments, data show they look to invest in buying homes after the initial years. There are several reasons for this.

In cities like Delhi and Mumbai, one has to sign an 11-month rental agreement with the property owner. Under this, the tenant is supposed to vacate the place within that period. Apart from the shifting blues, paying brokerages comes across as another irritant. Families with children find it even more difficult to move frequently. However, buying might not be the best option for many.
With a focus on the -National Capital Region (NCR), PropGuide lists the key advantages of renting and buying a property.

Noida

The average monthly rent for a 2BHK apartment in Noida would range from Rs 16,000 to Rs 23,000. Taking into account an appreciation of six per cent in your annual rent, you might end up paying at least Rs 70 lakh for your stay of 20 years. Now, a similar 2BHK apartment in the newer areas of the city would cost you around Rs 50 lakh. That translates into a monthly equated monthly instalment (EMI) of roughly Rs 40,000 for a period of 20 years.
Therefore, if you are looking for a long-term investment option, putting your money in a home in Noida not provides stability but is also rewarding when compared with other asset classes like fixed deposits, recurring deposits and shares.

Gurgaon

The average monthly rent for a premium home in Gurgaon is around Rs 40,000. It can go to as high as Rs 50,000, depending on the society. A 3BHK apartment in Gurgaon might cost between Rs 1.5 crore and Rs 2.2 crore, depending on the area. If you go for a home that costs around Rs 2 crore, the monthly EMI will be Rs 80,000 to Rs 90,000.

Therefore, buying a home in Gurgaon is costlier when compared to renting. This, however, can be useful, if you are looking at short-term stay and do not consider settling down in the city. If you want to stay in Gurgaon for 10 years or so, renting a home is a better option. It will reduce your monthly outgo by at least 40 per cent.

If you plan to retire and stay in Gurgaon for the rest of your life, though, it is very important that you buy a home. While it will remain an appreciating asset in your portfolio, selling the home later might also give you handsome returns.

(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities.)