People often wonder whether they should buy or rent their home. There are many things to take into consideration, not all of them financial. We’ll cover some of the pros and cons of buying vs renting so you can decide which one would be right for you.
You’ve probably heard the saying 'renting is throwing money away'. This is because people equate renting with giving away your hard-earned cash. You’re not building equity when you rent, so when you move out you cannot sell your property or make money from it.
Renters, on the other hand, do not have to pay for upkeep or repairs. They are able to move whenever they wish depending upon the lease and often only have to pay a penalty if they would like to be released early. It may be better to think of rent not so much as throwing money away but a payment for peace of mind as well as the freedom to move should the tenant have a change in circumstances or a job in another city.
Since the apartment or house does not belong to the tenant, the landlord can decide they no longer want to rent the property. This is not always the fault of the tenant. Sometimes a landlord wants to give the apartment to a family member or live in it themselves. When renting, the tenant is not guaranteed the property in the same way as they would be if they had bought it. A bad landlord can make life a nightmare for tenants if they are unwilling to make repairs or take care of the property.
However, the worst thing that can happen to a renter is eviction. A homeowner has a mortgage to worry about and a foreclosure can be incredibly damaging to their credit report. Losing a house can mean far more difficulty in finding another place to live and debt on top of the rent that person will have to pay in order not to be homeless.
If they can afford to buy a property outright, this may be preferable to renting. Then there would not be a mortgage to worry about and their home will belong to them free and clear. There is still the matter of taxes and these can be prohibitive depending upon where the buyer has purchased their property. Another option is to purchase land and build a property on it. As long as the owner builds their property to code and with permission this can be one of the cheapest avenues into home ownership.
For some people, the assurance that they own their property is reason enough to buy. Some of the risks involved, such as being upside down in a house where the value of the property has fallen due to economic reasons, are not reason enough to keep renting forever. Families in particular tend to want the security of a home they can call their own.
Everyone’s situation is different and their wants and needs will not be the same. Whether you choose to rent or buy is entirely up to you and your situation. You can make the choice that you feel the most comfortable with, whether you want the security of a home of your own or the freedom to choose your next destination with a minimum of fuss.