Everyone seems to be debating whether it’s better to rent a home or buy one. But according to CA Abhishek Walia, co-founder, Zactor Money, we might be missing the real point.
“Renting vs. Buying is not the real debate – Liquidity vs. Liability is,” Walia wrote on LinkedIn.
Walia believes “It’s not a real estate debate — it’s a cash flow debate,” he explains.
He breaks it down with a simple example. Suppose you buy a flat worth Rs1 crore. You pay Rs 20 lakh upfront and take an Rs 80 lakh loan. Your monthly EMI works out to around Rs 70,000 for 20 years — adding up to Rs 1.66 crore in total payments.
Now, imagine renting a similar home for Rs 30,000 a month. That’s a saving of Rs 40,000 every month compared to your EMI. If you invest that Rs 40,000 at a 12% annual return, you could end up with around Rs 3.67 crore after 20 years — and you’ll have access to your money the entire time.
This plan, however, works only if you are consistent and disciplined with your investments. “Of course, this only works if you’re disciplined enough to actually invest that difference — and that’s the hardest part,” Walia cautions.
Many people intend to invest but end up spending instead, which is why the idea of renting may not always translate into better wealth creation unless one has financial discipline.
Buying a home gives long-term stability and a sense of security, something that renting cannot fully replace. However, renting allows you to stay flexible — you can move easily, change jobs, or shift cities without being tied down by a loan.
“Buying gives you stability and emotional security. Renting gives you flexibility and liquidity,” Walia points out.
Ultimately, it’s not about which option is right for everyone. It depends on what you value more — ownership or opportunity.
“One ties up your cash. The other multiplies it,” Walia sums up.
His advice is simple yet powerful: “Don’t make financial decisions based on family pressure or FOMO. Run the math and ask: Does this give me liquidity or liability?”
In the end, it’s not about owning a house or paying rent — it’s about making your money work smarter for you.