To Rent Or To Buy? That Is The Question
While everyone needs a roof over their head and a place to call home, you can typically have the option of renting or buying accommodation. Buying is obviously the more outright expensive option, but it might be a better choice than renting in some cases.
Ultimately, it is up to each individual to make the call and understand the pros and cons of both options. Here are some of the advantages and disadvantages of both renting and buying to help you make your decision.
Advantages of Buying a Home
For many people, the biggest perk of investing in your own home is knowing that you fully control the property. If you want to invest in landscaping, remodel the home or even just paint the exterior, you don’t have to check with the landlord first. After all, you own the place! In many ways, the monthly mortgage payments on a home are also a mandatory saving plan. You are required to pay a set amount each month, and that money goes towards the complete ownership of the home. Down the line, you can use that as equity for another loan, or you can enjoy the money back if you decide to sell in the future. Once the mortgage payments are done, your monthly expenses will drop considerably and allow you greater financial freedom.
Disadvantages of Buying a Home
While buying a home might be the right choice for some, there are some major disadvantages as well. The biggest obstacle is the financial aspect. If you decide to purchase a home, you will need to have a significant portion of the total value saved for use as the down payment. In addition, you are required to pay a set amount of money each month for the duration of the mortgage loan, which could be thirty years or more in some cases. There are also maintenance costs associated with owning a home, and there will be no one else responsible for the upkeep or repairs. If your mortgage is dependent on interest rates and not fixed, then you might have fluctuating expenses each month that upset your budget. Finally, a drawback to buying your own home is that the decision is permanent. If you have children, decide you would rather live in a different area or get a job promotion, you might have limited options when it comes to selling the home and moving.
Advantages of Renting a Home
For anyone not yet ready to commit to a big home purchase, renting a house or an apartment could be the perfect choice. The commitment is minimal, and renting is usually done in one-year increments. Overall, your financial burden will be much lower than with a home purchase. Rental payments are smaller than mortgage payments in most situations, and you won’t have to afford a big lump sum in the form of a down payment when you move in. In addition, renters generally won’t have to worry about repairs or maintenance, both of which are taken care of by landlords or designated staff. This is typically the best option for young people who don’t have steady careers with one company or those who may move in the near future.
Disadvantages of Renting a Home
Although renting might seem like the obvious fit for young people who don’t want a serious commitment, there are also some drawbacks to this kind of accommodation. To begin, renters will be limited in terms of what they can and can’t do in the home. Guidelines might restrict pets, parties, smoking or painting the walls. In addition, the money you pay each month can’t be considered a form of saving as it goes to paying off the asset of the property owner. Renting has the potential to be pricey if you need to buy furnishings for a short-term apartment. Thankfully, you can rent the latest fridge, television or washing machine rather than buying your own. This cuts down on spending and gives you the flexibility you may want.
Both renting and buying can be good choices depending on your budget, priorities, family size and career. These pros and cons can help you decide which option is best for your own future.