Does a renting lifestyle help mitigate uncertainty?



Apr 3, 2020

Rent is no longer synonymous with just houses. Gadgets, furniture, clothes, bikes and cars are just some of the things Indians are renting today. Jobs that may require frequent location change, budget constraints and an aspirational lifestyle make the renting economy a reality for India. For instance, some estimates quote the current market of just the furniture rental market at $800 million.

What do you rent? An air conditioner for the summer? A dress and accessories for your cousin’s wedding or a desktop for a short period? If you have a need, finding a rental answer is not difficult in urban India.

Managing money within your budget is essential, even more in the difficult times as now. Does renting allow you to budget your life well or are there hidden costs? We break down the pros and cons of a renting lifestyle to help you figure what works best for you.

Where renting scores over buying:

1. Lower cost, at the outset

The purpose of rental is that it is cheaper if you cannot afford to buy the assets outright. Rentals also work out to be less expensive than the related EMIs. A renting lifestyle is more affordable, especially when you are at the start of your earning years.

2. Access to the latest

Gadgets are upgraded continuously, and car companies are releasing new variants too. By choosing to rent, you have access to the latest technologies in the market.

3. Depreciation of assets

Consumer assets get depreciated heavily and may even get obsolete quickly. So, instead of blocking your money in expensive assets, you can divert your money into investments.


Renting is not permanent; this means you can choose or change your rental if circumstances require you to. You may need to change cities due to change of a job, or you may require a vehicle for a few months to commute to a new office or need to check out a bed before you buy it. You can have any or all of this easily if you go the rent way.

5. No loan stress

Buying high-value assets on loan can cause you to be burdened by high EMIs, which can add to your day to day stress. Home loans, especially if you need them to be affordable, come with long tenures anything between 10 to 30 years. Such a long-term financial obligation can cause a lot of stress which can be avoided by renting a home.

But what are your reasons for renting? Is that you cannot afford to buy or have you just become too comfortable in your renting lifestyle? While renting comes with its fair share of advantages, it also has some pitfalls which can make you want to switch.

When renting can pinch

1. Hidden costs

There are certain things that you need to use your whole life – phones, electronic appliances, and so on. Renting these items for a longer time will mean you end up paying much more over the years than you would have had you purchased them outright.

You will be liable for any damages that may occur when you use the rented item such as vehicles. Rental options often come in packages or set time frames; for example, you may end up renting a cooler for three months when you needed it just for two.

2. Pride of ownership

Everyone aspires to own a home or a car. These items can give you the happiness and pride that a rental one probably may not. At Basis, you can plan your financial goals and invest in recommended funds to build for these goals.

3. Old is not always gold

Rented items are essentially pre-used. These may not be in the best of the condition and you may end up renting out poor quality items ruining your entire user experience.

So here are things to keep in mind when you opt for a renting lifestyle;

  • Renting works best when it is for a shorter period, and during your early years of your earning.

  • If you are renting some things to test before you buy, such as furniture, decide and go for purchase sooner rather than later to avoid the excess cost.

  • Renting can work well to avoid high one-time costs such as clothes for a fancy event.

  • Make sure you know the terms of the agreement and check the condition of the rented item before you start using it.

  • Understand your needs and budget for the item before you rent. Renting things cost you too. You can end up spending a lot of money on what may be a ‘nice to have’ piece of furniture versus what you really need.

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