The article is a very good starting point on the topic.
Sometime back I read a thumbrule - In case the rentals is less than 6% of the value of the property - Go for rent, else Buy a house.
Recently I met an old rich man who has made good amount of money to explain his approach - he said - "buy land which will be inhabited 5 years from now". (the logic is, if lots of people are already staying there, then the prices would have appreciated, and further rise is unlikely to happen).
On Option one may consider - Buying plots a bit away from the city (a place which will become good five years hence) - and buy multiple plots (2-3) side by side. Later, you sell off one plot and with that make the house construction.
One more approach I have seen is making houses and keeping provision for expansion of units, that can be rented out. I have also seen some people coming up with separate 1 bedroom units, which can serve as Home Stays - this largely will apply to big cities.
RE:Build a House or Rent
by Ganesh R on May 01, 2007 10:21 AM Permalink
Cling on the gentleman's advice. He's right. However, there's also risk that, what if the land value does not appreciate? So selecting the place becomes more important which cannot be read anywhere, but comes from experience. Seek that old gentleman's advice.
