Home & Property · 10 min read
Rent vs Buy, the honest maths (with opportunity cost)
Your parents will tell you 'rent is wasted money.' That's wrong about 60% of the time in tier-1 metros today. Here's how to actually decide.
Krish Dalal
Founder and editor, PaisaExpert. Master's in Business Management, SP Jain School of Global Management, London. · Last updated 2026-04-05
The middle-class default script for Indian young adults is: rent for a few years, then buy. The maths is usually less obvious than that. In metros where rental yield (annual rent ÷ property price) is under 3%, renting and investing the difference often beats buying, for the same 20-year horizon.
Frequently asked
It depends mostly on the rental yield in your city, which is annual rent divided by property price. In most Indian metros today that yield is only 2.5 to 3.5 percent, which means renting and investing the difference (the down-payment and the gap between EMI and rent) often beats buying over a 20-year horizon. In smaller cities with higher yields and stable jobs, buying tends to win.