I’ve been trying to logically evaluate the rent vs buy decision, but my conclusion feels counterintuitive.
Current Situation:
• Rent: ~Rs. 80K/month
• Expected annual rent increase: ~7%
Alternative:
• Buy a flat worth ~Rs. 2 Cr
• Or invest the price difference at ~10% annual returns
Based on rough calculations, renting plus investing the difference seems to generate better long-term returns, which feels confusing since most people strongly recommend buying property.
I’ve also used online calculators, such as:
But I’m still unsure if I’m interpreting the numbers correctly.
Possible Areas Where My Analysis May Be Wrong:
• Incorrect property appreciation assumptions
• Underestimating maintenance, taxes, and other ownership costs
• Overestimating investment returns
I’d really appreciate insights from people who have personally made this decision and can help identify flaws in my thought process.
Your math is correct. Renting a flat in Bangalore looks good financial decision. Compared to property, price rental yield is very low. If you have basic knowledge and interest in stock market, you can invest your money over there. But make sure don’t invest all money in one share, diversified into many other shares and also check for mutual funds or index funds. Stocks in India have generally grown about 10-12% per year over the long run, which builds wealth faster than property prices usually do.
Buying a flat means you are locking your money in one property, and its hard to sell quickly, if you need money. Investing in Stock market spreads your money across multiple companies, so your risk is lower and your money can grow faster. Even after paying rent, the growth from investments can beat how much property values usually go up.
So if you have some basic knowledge about stock market, you can build your money and keep flexibility, renting and investing in stocks is usually smarter.
If you’re buying a flat for 2 Crore after 10 or 15 years, the value of home will typically appreciates three-four times. Meanwhile, your rent will increase about three times.
Yes, investing in stock market gives you good returns, but think carefully about inflation, taxes and market swing will lead to loss your money.
Paying rent will double than your EMI, it doesn’t build any long-term value for you. Every rupee your paying that goes for your house owner only, after paying years, you don’t own anything tangible.
Buying a home early is not just a financial decision, it’s a life decision.
Renting vs buying is really a tricky decision, especially city like Bangalore. Sometimes we feel renting a flat is good decision, sometime buying a flat looks great. Only one thing I want to tell you, simple, if you’re going to living for long-term I’d suggest you to buy a flat on your own. On the other hand, if you’re looking to shift to some other cities, it’s better to rent a flat. Take decision according to your situation.
I am currently staying in a rented flat, and my landlord is such an irritating and nonsense. He never allows us to make any drill in the wall. Already this summer has been unbearable hot, we planned to install an AC in our room. But because of drilling was required, he didn’t allow us to install the AC. As a result, my children have been suffering in the heat, struggling to sleep properly for many nights. I am truly regret for not owning a home for our own. When God gives you opportunity; please use it wisely. Living in your own home is not just about comfort; it is about dignity, freedom, and peace of mind.
Yeah you’re correct. Renting is an ideal option than buying. Only few people can understand the reason behind it. When you live in a rented flat you don’t need to go for long-term commitment.
The most importantly, renting gives you flexibility, If you want to change your job to some other city, so can easily shift over there without the burden of selling a property or managing a mortage.One lesson I have learnt, renting is not about just saving money, it helps to keep your life open to change, growth and mobility.
Buying a new flat is a great idea. Instead of simply spending all our hard-earned money in rent. It is better to invest in buying a new property.
Renting looks cheaper short-term, but long-term it drains wealth. Buying a property locks you into a commitment, but it builds equity and creates massive appreciation. In your case, paying Rs. 80K rent with 7% annual hikes means you’ll spend more than the cost of the flat itself over 15 years without owning anything. Buying the flat not only saves you from rising rent but also gives you an appreciating asset worth multiple crores.
Make sure, are you going to buy a flat entirely on long-term loan? Then your interest burden is massive. If you pay a large portion, upfront (40-50%) that will reduce your loan size and saves significant amount in interest. That saved interest is essentially profit, because it’s money you didn’t hand over to the bank.
Partial prepayments during the tenure also cut down interest dramatically, but most people don’t plan for it.
Whether you are looking to a flat to buy, always remember that location is very crucial factor. A property’s value doesn’t just depend on the size or design and it depends on where it is situated. In Bangalore areas like Whitefield, Sarjapur Road, and North Bangalore have seen rapid growth because of IT hubs, upcoming infrastructure, and better connectivity. Buying property in these areas will lead to much higher appreciation than the established area.
So whenever looking for rent vs buy, don’t just look at numbers. Look at location potential. A well-chosen location will give you more profit in long-term.
I personally feel owning a home is an emotional decision. Everyone says and looks it as profitable and financial decision. However, I see it as an emotional decision. A home represents independence, a freedom place to live without anyone’s permission. No one will suddenly come and ask you to vacate within a limited time. It’s about stability, security, and the comfort of knowing the space is truly yours.
Owning a home isn’t just about investment; it’s about belonging. It’s the foundation where memories are built, where you feel safe, and where you can truly be yourself.
Both renting and buying have their own financial advantages. Owning a home isn’t right for everyone. It is entirely depends on you. If are going to live in Bangalore for long years you can choose buying option. Whether you have any other future plan to shift to some other place don’t go for buying. Just invest your money in any profitable share simply enjoy your life.
I don’t know why people are afraid to invest in stock market. Because it helps your money to grow faster than inflation, provides ownership in companies and also offering liquidity and diversification opportunity. Of course, I won’t say there is no risk, risk exist. But that’s true of any investment. The difference is that disciplined investing, smart diversification, and a long-term perspective make stocks one of the most effective tools for financial growth.
The stock market isn’t something terrible, once you learnt how to make profit, you will be the king.
Yes, I agree with you. I’m a homemaker and I have lot of interest in trading. To be honest, I earn minimum 1 lakh every month from the stock market. For me trading gives me independence, empowerment and proving me anyone with dedication and discipline can succeed. When you embrace it wisely, it really change your life.
I am happy to hear your success story. But not everyone achieve this. Only people with strong knowledge of the stock market can reach such heights; it’s not something ordinary people can do without preparation. 2 crore is not just simple money, that is your years of hard work, so be mindful on this and take wise decision.
I feel most of the people recommend to buy a flat. I know that in earlier generations they saw massive property appreciation. But, today already the market price are high and growth may not be as fast as before. The market has matured, and appreciation is likely to be slower and more dependent on factors like location, infrastructure development, and overall economic growth. At the same time rental yields are low compared to property prices.
So, in the financial point of view, the returns from the property is not more beneficial than before. That’s why options like renting and investing the difference are starting to make more sense to many people, especially those who are comfortable with financial markets.
Most people say they’ll invest the difference, but honestly, very few actually do it consistently. Over time, that extra money just gets spent on random things.
EMI, on the other hand, forces you to save whether you like it or not. That’s why for a lot of people, buying works better in practice.
If you’re disciplined, renting + investing is great. If not, buying a home is the safest path.