Renting Vs Buying a House: Pros And Cons
Every adult gets to that point in their life where they are debating between renting a house or buying a home.
The answer to the rent vs. buy a home debate isn’t as cut and dried as most would like to imagine.
People have different preferences and different motivations guiding their decisions on this all-too-important decision.
Before making a decision, it is important to evaluate your current situation in life when posed with this dilemma.
For starters, what is your financial situation at the moment?
There are many renting vs buying calculators out there that you can use to determine whether it is a good time for either.
As dreamy as it sounds, let’s be honest, owning a home isn’t cheap.
Flexibility Or Stability
It is also important to look at your intentions. Are you looking for a flexible place where you will mover from time to time or do you want a stable permanent address?
Both buying and renting a house have substantial reasons for and against them.
It is up to you to determine which one outweighs the other according to your needs.
Benefits Of Home Ownership
Being a homeowner is great as you don’t have to answer to anyone. You are the landlord and property owner hence you only have yourself to answer to.
You don’t have rent to worry about and once you are done paying the mortgage, you are done with monthly payments.
Accumulation Of Wealth
By buying a house, you own an asset that has the possibility of going up in value as the years keep going.
This happens without you having to lift a finger as the property value appreciates. In essence, you are creating wealth.
There is a certain level of respect people who own homes are given in society. People believe that people who own houses are better organized in life and are good with money.
There are certain tax benefits that come with buying a house. There is the possibility of sizable tax deductions.
Cheaper In The Long Haul
When you look at how much you will have spent in five years, it could be cheaper than if you were renting.
Disadvantages Of Buying A Home
A Lot Of Hidden Costs
What many people don’t realize at first when purchasing a home are the hidden costs required to make the house a home.
As a homeowner, you are in charge of handling all the necessary repairs and renovations.
Decline Of Value = Loss Of Money
The value of your property is at the mercy of the economy. If it declines, you lose money. So, once you get home, you should be more into economy and market trends.
Sizable Initial Cash
Most times where buying a house is involved, a person is expected to pay a substantial amount of money as down payment beforehand. It also involves a lot more paperwork.
New buyers can be swindled into paying more than necessary for a house. Therefore, you should do your research thoroughly and be ready for unexpected.
Benefits Of Renting
Freedom To Move
As the saying goes, ‘You are not a tree, move’. Renting is ideal for people who want to move from place to place and don’t want to get tied down.
In renting, the responsibilities of repairs and renovations fall on the shoulders of landlords. However, it doesn’t mean that you don’t get to pay extra if you personally destroy something.
No Property Tax Bill
You don’t have to pay for property tax as that is the landlord’s concern. Although this one is true, you will have to make your payments on time, because otherwise, your landlord won’t be able to make his or her payments on time.
Cheaper Than Mortgage Payments
In most cases, the amount of money people pay monthly as rent is significantly less than that of a mortgage payment.
Contracts are binding and many landlords make tenants sign a lease for at least a year. In spite of the freedom involved in renting, these contracts tie people down and they can’t move whenever they please.
Landlord Makes Sale
Renting is a huge risk especially if the owner is looking to sell the property.
If they seal the deal and sell, you are given the notice to vacate abruptly without enough warning. You’re never really 100% comfortable and secure in renting.
Rent Goes Up Annually
Renters can all relate to the hustle involved where the rent goes up annually. No one ever looks forward to paying more for a house they have been living in.
No Wealth Creation
Since the house and land are not yours, you don’t get to celebrate and reap the benefits when the value of land goes up. Or you have to work harder and be more saving-oriented.
Answer To The Landlord
At the end of the day, you are not really in control. You have to answer to the landlord and property owner where house-related things are concerned.
This is hardly ever a comfortable situation for anyone as some landlords can be rude and unreasonable.