Go walk in nature, notice the leaves falling, make time for family,
#InvestInMoments; we'll manage the rest.
#InvestInMoments; we'll manage the rest.
Buying or Renting a Home
This template compares the financial impact of buying or renting a house and the outcome in terms of end-of-period value.
The important variables that you need to input are:
- Expected appreciation in value of the house
- Total cost of purchase of the house
- Closing costs—registration, stamp duty, brokerage
- Down payment
- Home loan interest rate
- Tenure of home loan in years
- Initial rent (stated as a percentage of the value of the house)
- Rent appreciation
- Gear of investment (this determines the asset allocation and expected returns
Once you select these parameters, the template calculates the cash flows month to month and compares the final net value of your portfolio at the end of the loan period. The assumption is that you will invest the down payment as well as the additional money (difference between EMI and rent) into your investment portfolio.
Additional Resources
Buying vs Renting template can be better used with context around housing price trends. Despite contributing significant share to Indian GDP, only limited data on Residential housing is available for investors. We found two reliable data sources for housing prices: Housing price Index and NHB Residex. Housing Price Index
The index aims to track pricing trends in residential home prices across 13 cities of India. The index also tracks the index trend separately in top-8 cities of India: Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Pune, Delhi NCR.
As the major chunk of residential homes are in the form of 1-BHK, 2-BHK, and 3-BHK, the index considered these three properties prices trend. This index helps investors, home buyers, and other stakeholders to evaluate the opportunities in housing market. Housing.com has started collecting and tracking this data since Jan 1, 2017. 
We have written two blogs associated with Real Estate, Buying vs Renting.
The first blog explains about housing price index and its limitations.
Blog link: https://www.gulaq.com/personal-finance/house-price-index-and-its-shortcomings/
The second blog is about REITs, which allows retail investors to invest small amount in Real Estate. The blog explains about retail and commercial REITs along with the available REITs to invest.
Blog link: https://www.gulaq.com/personal-finance/real-estate-investment-trusts-reits-commercial-vs-retail/
Blog Link: https://www.gulaq.com/personal-finance/deep-dive-into-f…estate-investing/
