The question on Buy or rent can easily be answered. If you take a place to stay on rent you avail a tax exemption of Rs. 40000/- p.a ( 3500/- p.m). If you buy a house on loan you get a tax exemption of rs.150000/-p.a ( 12500/-).Now if your net EMI ( EMI -tax exemption) is equal to or less than 1000 p.m (4500-3500) you are better of purchasing house on loan.