A large percentage of India’s population comprises millennials, which form the majority of the wage earners and consumers in the country. This population is more mobile and continuously moves out of smaller towns to cities for higher education and employment prospects. This has given rise to the need for several rental accommodations in most Indian cities over time.
Certainly, purchasing a home is wonderful. It helps build impartiality and interest, and it is a key life milestone achieved. However, for many millennials, renting is their trend. As per the survey, it has been found that among one thousand renters between the ages of 18 and 34, almost eight out of 10 do not prefer trading their flats for homes anytime soon. Here are the reasons why.
It is in the financial plan.
With student loans placing a huge dent in millennials’ accounts, it is no shock that they like monthly rent payments, and attain additional debt in the form of a mortgage. Moreover, property taxes, closing costs, and home insurance payments add up fast — renting is frequently the more economical short-term alternative.
Live where you want.
Renting makes trendier, more sought-after areas of town near millennials who are not making as much wealth as they will be in some years. For example, one can look for a house for rent in North Goa. It is a great way to preview the price, commute, and overall vibe of a locality before making a lasting financial commitment. And if the rental house doesn’t live up to the hype, it is easy to move out.
Go as you please.
When moving to a more desirable neighborhood across town, millennials love the idea of being able to choose and go when their lease is up instead of being tied down by a mortgage. For instance, if a person gets a job in Goa and plans to move with family, then he/she can easily look for a 2 BHK flat for rent in North Goa.
Let the proprietor handle it.
Yardwork, upkeep, repairs — a lot of time and money goes into house maintenance. That is not to mention utility expenditures. As a tenant, these costs and chores are usually covered by property management. As a homeowner, it is all on you. Passing expenses and labor to a landlord can be a huge advantage for hard-working millennials who want their free time and have the funds left over to enjoy it.
Why do Indian millennials prefer to rent apartments?
Millennials do not want a huge EMI liability early on in their careers. They do not want something that will take away 20-30 % of their salaries. They do not want to be tied down to a mortgage, which adds risks to their lives. In the continuously changing corporate setting, millennials as well do not want to be tied down to a house for the rest of their lives. They want to have the flexibility of moving jobs or countries.
Renting is cheaper than buying.
For example, the price of a 2 BHK apartment in Goa is about Rs 80 lakh. Buying such a house via loans translates to a monthly equated monthly installment (EMI) of around Rs 56,000.
Rent-wise, an individual can pay around Rs 30,000 per month for a 2 BHK flat for rent in North Goa. Certainly, there is a vast disparity between EMIs and rent. If renting is thirty percent of what possessing would be, why would a person want to buy?
The complication of home buying procedures
The miscommunication, utter fragmentation, and complete lack of technology in the industry are big restrictions on home-buying. It would help if home loans were available with fewer procedures and paperwork.
In the same breath, there is adequate and more empirical evidence and actual data that shows that these millennials are paying attention to fintech firms to take loans for very small purposes as most fintech firms offer loans at the tap on your mobile and with small verification. Too much ease, therefore, is also a risk.
When will Indians buy more homes?
- To make owning a house more enticing in India, the rent to EMI ratio will be similar. This can be coupled with more tax incentives for first-time homeownership, way more than it does at present. This can be done by offering income tax incentives, and property tax waivers, among other things that decrease the burden for first-time homebuyers.
- Most of India’s working millennial population makes buying decisions on their mobile phones. The availability of online loan approvals, online mortgage estimators, tools to verify property charges, and shop finance lenders will make it simple for the Indian millennial to consider purchasing a home.
- If the entire purchasing process is apparent and takes about a month to complete, homebuyers will be more eager to sign up to do all that. If more companies can offer easy-to-understand mortgage packages that can be compared across sellers, it will incentivize the millennial purchaser.
In conclusion, India has a long way before the real estate adoption rate increases. Experts say that it is always better to look for a house for rent in North Goa for short-term requirements.
However, purchasing at least one home is generally a good idea to offer yourself certain financial security in your old age. If you can afford to purchase a house, get in touch with your financial consultant for an appropriate course of action.