Comparison outlook on Renting vs Buying
People rent all the time due to less house-related responsibilities and the flexibility it offers. But owning isn’t it much better than renting over long time? or is it that renting is simpler and cheaper?
Well here are some highlights on the pros and cons of both.
Buying a house or apartment or any property is one of the biggest financial decision one has to make. Should one consider to buy; they should get the decision right.
Buying comes its pros. which might seem to outweigh rental in a long-term outlook approach. For instance,
- If the property rates in the neighborhood you’re in keeps soaring higher with huge margins, then it might be cheaper to buy than rent.
- Once your mortgage loan is paid off, then you can indeed have the pride of being an independent home owner – not entitled to any landlord monthly rent.
- You could consider improving the home, say equipping your space with new and efficient appliances. With time, these renovation add quite value to the property. Which means, should you sell it; it will fetch a higher price than you bought.
- How about renting the space and moving into a cheaper one, and get the space to fund your other wants or save for better retirement?
But buying a property comes its downsides too.
- It’s a commitment that needs financial discipline and most importantly the buyer going for what they can afford.
- If it’s a combined financial investment and something happens – either you separate or in the event of death, and you are unable to bear the burden of paying back the loans alone, this leaves in a complicated position.
- Renovation costs money and sometimes it might be costly to acquire necessary permits, contractors, right materials etc.
- When a home value takes a dip; you might not sell the property if the mortgage lender still owes you more than the sell price
- some property types such as apartments and condos have the service charge that’s payable monthly for the property you still own, which kinda ties you to some “rental-like” situation
Well, this is common especially in urban set up.
Renting has predictable payment, and should it be costly – you have an option of moving into a different location. This flexibility is not available with buyers.
You don’t handle any repairs, instead the property owner has to foot these renovation bills, on your behalf.
The only major downside is price change. As a tenant, you face unpredictable rent increase when your lease is up for renewal unless your property has fixed rent policy.
Which is better? All seem fair – but it boils down to you – as an individual.
Not just about money, but also your comfortability factor, and future plans. If the space is small for a big family you would need to move. But as a home owner, it might be tough compared to renting.
On the other side, when you own the property, you can raise your family in a permanent set up!