For some individuals, owning a property would be a more financially beneficial decision then renting a property, and vice versa. It all depends on the long-term goal of a person and the property they are investing their money in. We all have been through this dilemma once in our lifetime. There are a number of ways to calculate the net-cost of renting and buying the house. This will inform you of the potential value of the house overtime and the amount of money you will be spending on it. This will help you in making the right decision. Below we have mentioned the pros and cons of both of these alternatives.
Owning a Property
1. Long-term Benefit
When you invest in a home or property, its value increase as the time passes by. Therefore, if you are planning to keep the house to yourself for a long term, chances are you will get the double of what you bought it for because the equity keeps building up.
People have an irrational believe that they are wasting their money on rent because they are not building equity with the rent payments they are making every month. However, even if it were true, you would have to put your money even if you plan of buying your own house. Moreover, the cost of renting is lower than the cost of owning the house. This is because of the property taxes, water and sewer services, pest control, homeowners insurance, natural disaster insurance, trash pickup, repairs and maintenance, and tees trimming services you pay for only when you own the house.
It is true that owning your own house will be a less flexible choice, but it will offer you the stability you desire. The costs of mortgage are fixed, unlike the cost of renting, which keeps you prepared to pay a particular figure on a monthly basis.
Renting a Property
1. No Repairing Costs
The best part about renting a property is that you do not have to pay the cost of maintenance of that home. Whether it is a small repair like breakage in the toilet, or a big one, the property owner of the house will have to fix and repair the breakage. This will cut your expenses and you can put that money in your saving account.
2. Greater Flexibility
When you rent a house, you have the option to change the location any time you want. If there has been a change in the location of you workplace, or if you unexpectedly lose your job, you can find a place to rent near the office, or find a place with lesser rent, respectively.
3. Cheaper Choice
Lastly, we all know that renting a home is cost effective, as compared to buying a home and paying heavy mortgages on it. What’s more, the utility costs are included in the rent, so you can save more and more money. There is no down payment requirement for renting a house either.
It is not always about the money. Rather, it is about your long-term goal – Your job security, satisfaction with the job, the house, and your plan on building a family – all this will determine if renting a property will be the right alternative for you or owning one.