Rent vs. Buy: The 1% Rule Decodes Your Home Ownership Dilemma

• The 1% rule suggests buying a home is a good investment if its monthly rent is at least 1% of its price.
• For example, a Rs 1 crore flat should ideally fetch Rs 1 lakh monthly rent to be considered a profitable buy under this rule.
• In India, the 1% rule is primarily useful for investment analysis, as average rental yields are around 2%, lower than developed countries.
• High property prices in major Indian cities like Mumbai, Delhi, and Bengaluru often make renting a more sensible choice due to disproportionately lower rents.
• Beyond the 1% rule, factors like maintenance, property tax, stamp duty, loan interest, job stability, and personal needs are crucial for the rent vs. buy decision.

Why It Matters: The 1% rule offers a quick guide for home buying decisions, but consider all financial and personal factors.