Buy or rent a house? Use these scores to arrive at a logical decision

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Whether to buy or rent a property is a complicated decision. On one hand, there is a barrier in the form of high property prices. At the same time, given how value-conscious we are, we hate to pay rent. The common wisdom is that if you can tighten your belt for a few years and pay a little more in equated monthly instalments (EMIs), you will end up with a capital asset.  There is also social prestige attached to ownership of a house. Given all these economic and emotional tugs, it is difficult to take a rational decision. Arthayantra, a financial advisory firm, has come out with its annual ‘Buy versus rent’ report. The 2017 edition covers 12 cities. For each, scores are assigned, taking into account variables such as the cost of buying (down payment, EMI, cost of maintaining the property) and cost of renting (security deposit, monthly rental): The higher the cost of buying versus cost of renting, the lower the score. 

The score also takes into account income levels. After all, for someone who has a higher income, it makes more sense to buy, whereas for someone with a lower income, renting would be preferable. Use these scores to arrive at a logical decision.  

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