Owning vs. Renting a Home: Which is better?
There is a lot of conflicting information on renting and owning out there. While buying a property requires a substantial financial commitment, renting can feel like paying your landlord’s mortgages. Though owning a home brings great satisfaction and pride, it comes with plenty of extra costs of maintenance. Hence, the decision to own or rent a house comes down to finances and saving goals. The debate on this topic is endless, as there is a grey area that exists between the two. Here is a comparison between owning and renting a home that can help you to make a better decision.
Points to Ponder
Rent costs you less as compared to down payments that you need to pay for buying a house. Even if the landlord asks you to pay for a security deposit, you will spend less. Also, the landlords can increase rent by the rate of inflation only, keeping the cost down. Whereas if you own a home, you will have to deal with taxes, maintenance, utilities, and insurance, all adding up to the cost. Hence, the overall cost of ownership is higher than renting.
You do not need to worry about renovating the house in case of a rented house. Repairs, if any, are the landlord’s responsibility. While you cannot personalize the living space of a rented property, it is possible in case of owned property. You can upgrade and modify the house as per your convenience to increase its resale value.
If you have plans to change your job in the future or relocate to another city or country for any other reason, leaving a rental property is less complicated. However, owned house increases your wealth as you build equity in it, that is, the difference between the market value and the amount you owe in it.
Whether or not to own a house is a big decision that affects not only your finances but also the lifestyle. Homeownership brings a sense of stability and belonging to the community. It becomes a place to put down roots. Besides, buying a home is a lifetime investment as home values increase over time.
Renting is more flexible and requires minimal responsibility. You are free to move anywhere without any penalty when your lease ends. It offers you the advantage of predictable monthly payments, which is not possible in case of homeownership. Deciding whether or not to buy a house depends not only on finances but also on your comfort and vision for life. So, you need to understand that owning does not always turn profitable, and renting is not about throwing money. To buy or not is rather an emotional decision, keeping in mind the finances. Therefore, you must go for the option that fits in goals and budget.