Renting vs Buying a Home
When it comes to choosing whether or not you should buy or rent a home, there are many factors that will appeal to different people. Depending on where you are in life, what the near future holds and, most importantly, your financial situation, one choice might be the clear winner. To help you decide, here are the pros and cons of buying and renting a property.
You have a wider sense of freedom and mobility when you’re renting a property as opposed to purchasing one. It’s the best option if you need to relocate for a job or want to spend more time travelling, especially if you’ve signed a short-term lease. Because of the lower cost of living when you’re in a rental, you’ll be able to live in areas you otherwise wouldn’t be able to purchase it. As a tenant, the only insurance you need to worry about is what covers your personal belongings. With the money that you’ll be saving, you can invest it elsewhere or start building a down payment to purchase a home in the future.
When you rent property from another person, you typically have little to no say in how you want the space to flow in terms of renovation. You can’t make permanent changes to the property without violating the lease and potentially getting evicted. You experience no return on investment as you would through owning property, nor do you have any control over annual rental inflation. When your lease expires, it’s up to the landlord as to whether or not they’ll want to renew your lease at the end of the term.
When you own your own home, you benefit from the security, equity and potential growth in your personal account, especially if the value of your home increases over time. Your home will be your property, both emotionally and legally. This gives you much more freedom then you’d find living under a landlord’s restrictions. You’re free to renovate, decorate, change up the landscape, whatever you want to best suit your wants and needs. When you’re a homeowner, you have the opportunity to refinance your bond amount if you ever need to withdraw large sums of money for a big purchase.
Owning a home comes with great responsibilities, especially when it comes to your finances. This includes mortgage payments, renovation costs, monthly utilities and regular maintenance to keep your home running. While renters have to deal with some of these costs as well, homeownership also comes with rates, maintenance, taxes and insurance fees. If you’re planning on reselling your home, there’s always the possibility that you won’t be able to sell it for the same price, or more, than what you bought it for. That could be due to the condition of the house, a drop in the market, a recession or simply higher interest rates.
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