Partly Hedging EMI through renting your home

I've heard this from two friends now. Someday it had to happen and it kind of makes sense too.

Many folks are buying homes; obviously with fat EMI's. Since EMI's are becoming burdens, some folks, who have to have brought properties in posh localities are turning towards giving out these homes on Company Leases or Service Apartments and themselves shifting to houses which warrant lesser rent.

The difference between the incoming rent and outgoing rent eases the burden till some extent from these fat EMI's. I think if possible everybody should adopt these policies. They make complete economic sense.

For e.g. a friend of mine bought a 1BHK in Viman Nagar for which he pays an EMI of 22K. He left that apt and moved to a cheaper neighbourhood which only has rent of 12K and managed to give his 1BHK for about 15K on lease to a company. The company now uses it as a guest house.

In the process hes making 3K which reduces his EMI exposure. 3K might not be a big deal, but its still something substantial.

If you keep the emotions of renting out your own home apart, this makes perfect economic sense. I would however advise everybody to do a proper cashflow analysis before thinking this option as setting up furniture etc at the new location could significantly add to the expenses.