Renting Vs Buying a Home

Should I Buy a Home or Rent? Well, I have been asked that question over a thousand times since I became a consultant in real estate management. It's probably one of the toughest financial decisions that you'll ever make. It's therefore advisable that you weigh renting vs. buying a house by its pros and cons.

Advantages of owning

The following are the benefits of buying a home. Check them out:

1. The moment you pay off your mortgage, you never again will worry about paying for a place to live in and that gives you peace of mind.

2. Your home can increase in value and in that way, you'll have a chance to buy an even a better home by using equity. You can also use the equity to fund a better retirement.

3. You can always do what you want with it, such as improving and expanding it, unlike a rental house where you'll have to get permission from the landlord. That also increases its value.

Potential downsides of buying

1. Buying a house needs a big commitment and you must be sure that you can afford what you've chosen. Otherwise, you might stretch your budget beyond the limits and might not be able to as easily provide for your daily needs like meals, entertainment, holidays and so on.

2. It's not flexible as compared to renting because when you decide to move, selling it might not be easy depending on your time frame involved.

3. While you may need to sell it, it might not be easy depending on the market situation.

4. If you take a mortgage with an adjustable interest rate, the repayment can rise.

5. If the value of your home goes down and you need to resell it, that will be difficult if it's worth below what you owe the lender.

Advantages of renting a home

1. Renting gives you a leasing flexibility because you can choose the term of your lease from either a short tem or a long term. For instance, if you're circumstances are fluid, you can chose a month-to-month lease and in that way, you can move at an instants notice.

2. You don't have to incur any other cost such as repair and maintenance because that's the responsibility of your landlord.

3. Renting can be a better option if you're on a budget because rent can be considerably less than a mortgage. This is not only because there is no property tax but also because renter's insurance is significantly lower than homeowner's insurance.

Disadvantages of renting a home

1. A renter is always subjected to the rules of the owner.

2. Rent payments are an investment with zero returns.

3. As a renter, you must live with the quality the house owner provides.

So, as per what you've read above, is it better to rent or buy a home? Well, you now know the renting vs. buying a house pros and cons to make your decision-making easier. Depending on your needs, financial status and what you intend to achieve, you can go for the option of buying a house or renting one whichever fits you.