Is Renting Really a Waste? CA Nitin Kaushik Explains the Middle-Class Trap
CA Nitin Kaushik challenges the traditional belief that renting is a waste of money, breaking down the financial implications of renting versus buying a home. His insights reveal a different perspective on the middle-class financial trap.
RentingHomeownershipFinancial AdviceMiddleclassReal EstateReal EstateSep 02, 2025
Kaushik explained that home loans often drain more money than people realize, even though buyers call it an “investment.” He broke down the math with an example: a house priced at Rs 1 crore with a loan of Rs 80 lakh at 9% interest for 20 years would mean an EMI of around Rs 72,000 a month. By the end of the term, the total outflow isn’t Rs 1 crore — it’s Rs 1.73 crore. That’s an eye-watering Rs 93 lakh paid just in interest.
Put another way, this “extra” money is almost double what it would cost to rent the same house for years. Kaushik argued that while rent gives you flexibility and liquidity, a home loan ties you down with liability, even if society frames it as ownership. His bigger point? Buying versus renting isn’t an emotional decision, even though most families treat it that way. It’s a question of timing and math — and ignoring the math can cost you lakhs.
Homeownership can leave you broke?
Kaushik had raised the same alarm in an earlier post, bluntly calling the dream of homeownership a potential trap. He warned that rushing into buying a house can leave families broke rather than secure. The reason, he explained, is that most people empty their savings to arrange a hefty down payment, leaving themselves with no cushion for emergencies. What follows are years of living paycheck to paycheck as EMIs swallow up 40% or more of monthly income.
According to him, the problem isn’t with owning a home, but with buying it too soon and for the wrong reasons. People jump into loans simply because they believe “rent is waste,” without checking if they’re financially ready. That’s where many middle-class families end up handcuffing themselves to a 20-year loan that feels more like a burden than an asset.
He contrasted the supposed “security” of ownership with the overlooked benefits of renting. Renters don’t pay property tax, don’t shoulder repair costs, and have the freedom to move cities when a better opportunity comes along. Most importantly, their money stays liquid — free to be invested in ways that might generate better returns than real estate. Kaushik’s advice is clear: owning real estate is smart only under the right conditions. Families should aim for a solid emergency fund, ensure their EMI doesn’t consume more than 25–30% of income, and run the numbers carefully before signing a loan agreement. Otherwise, that dream home could quietly turn into the biggest financial liability of their lives.
Frequently Asked Questions
Is renting always a waste of money?
No, renting is not always a waste of money. It provides flexibility and liquidity, and can be a better financial decision if you're not ready to commit to a long-term home loan.
What are the hidden costs of buying a home?
The hidden costs of buying a home include high interest payments, property taxes, maintenance costs, and the risk of tying up a large portion of your savings in a single asset.
Why do people believe that renting is a waste?
People often believe that renting is a waste because of the societal narrative that owning a home is the ultimate investment. However, this belief can lead to financial strain if not approached carefully.
What are the benefits of renting over buying?
The benefits of renting include flexibility to move, no property taxes, no maintenance costs, and the ability to keep your money liquid for other investments.
When is it a good time to buy a home?
It is a good time to buy a home when you have a solid emergency fund, your EMI doesn’t exceed 25–30% of your income, and you have carefully run the financial numbers to ensure it’s a smart investment.
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