A big question that may cross a person in his lifetime is whether to continue renting or finally settle down and buy a home. While owning a home is considered as a good idea, there are also advantages of renting a home. Additionally, there are disadvantages of both the above mentioned propositions. Given below are the pros and cons of renting as well as buying a house. Weigh the benefits and drawbacks of both and take a decision that best fits in your situation.
Buying a House
The following are the merits and demerits of Buying a house.
There are many factors that make buying a home a good move.
■The foremost benefit of buying a house is that it is a valuable investment. Although, down payment of money can be burdensome at times, it is still worthwhile as it increases your asset. And, if the economic scenario is good, your property value shall appreciate over a period of time.
■Buying a house provides a sense of stability and security.
■You can’t ignore the bliss of the freedom to design and renovate that you can enjoy as an owner of the house. You can live the way you like without having to bother about the visits of landlord.
■You can enjoy tax benefits as real estate tax and mortgage interest can be a tax deduction.
In spite of aforementioned privileges, being an owner of a house has its own demerits as well.
■Maintenance is the major issue as the upkeep of your house including the yard is your sole responsibility. In addition to physical efforts, you need to allocate funds for your house’s maintenance too.
■Cost involved in buying a home is another main problem. If you are looking for a mortgage, you should need good credit, down payments, stable income and employment. Besides, long term mortgage could lock you into one investment for more than 30 years.
■Relocating to another place is not easy as you find yourself rooted because of being a property owner.
Renting a House
The following are the merits and demerits of renting a house.
■The best part of renting a house is that you don’t have to bother about the cost and effort of property maintenance. This is one of the popular reasons why people prefer renting a house rather than buying. You need not worry about any issues as long as you pay your rent promptly.
■There is less pressure on your budget. Owning a house involves more than just the cost of the house. It includes taxes, expenses involved in upkeep of the house, etc. Therefore, renting a house is more practical as it requires small investment.
■Relocation is easier for those living in a rented accommodation. If you don’t like a locality, or want to move to another city you can change your house whenever you like.
Renting a house also has some disadvantages.
■There is little stability as any time the owner of your property can increase the rent or even send you a notice to vacate the house.
■You can’t restructure your house as per your wish. Even if you are allowed to make improvements to your home like landscaping, it will improve the value of the home and will benefit the house owner or just passed on to the next renter.
■The big disadvantage of renting a house is loss of value. Every month you pay rent but don’t get any asset out of it however, when you pay mortgage payment, you get to own a house after a few years.
Conclusion: Buying or renting a house depends upon a personal outlook and the financial status of every individual. If you are a person who is having the lifestyle that requires constant relocation, or want to have uncommitted lifestyle, renting a house might be the best option for you whereas buying a house is a smarter choice if you plan to stay in that house more than 10 years and have a cash to invest.