Most young people who are working today are looking for advice whether to buy or rent a house. Earlier, buying a house was the obvious solution because it was a lifetime investment. However, over the last decade, things turned around, and it’s not easy to make up your mind whether to buy or rent a house. This article will help you explain different pros and cons of both.
In the past, a decision of whether to rent or own was purely decided by whether you want to live in a house or an apartment. Nowadays there are a lot of factors which determine what you will do. Today land rates have gone up, tax and other expenses have also been added making owning a house expensive. Today there are condos which allow people to live like a community with provision amenities at a cheaper cost. Land rates have gone up, and real estate has been flooded making it hard to predict how the market will be for a long period.
If you live in a small apartment and you are looking forward to owning a house, you will find out that it’s more expensive and the reason behind it is because you are getting more square footage. Interests on home mortgages are deductible, but it is mostly overrated. In most cases, it’s expense which you are paying someone else instead. In fact, if you are looking to have a big tax deduction, you can contribute to charity reducing your overall taxation. House deductions are good, but still, they are an expense. You should seek advice from an accountant to understand how much you are supposed to pay.
When you rent a house, your landlord is responsible for paying taxes, insurance, doing maintenance and sometimes paying for utilities. On the other hand, if you buy, you are responsible for repair and all maintenance costs which are needed in a home. Hence, if you have a lot of these repairs in a year, you will end up using a lot of money than a tenant especially if you are hiring technicians to do the work. However, you can reduce these costs if you can do it yourself. Therefore, you can get the skills online on how to fix problems yourself without hiring professionals.
If you own a house, you have an advantage because you can use it as security to get a loan. If you are in a needy situation without savings, you may use your house to get a loan which you will later pay to get the security of your house back. This is a privilege renters don’t have because they don’t possess necessary ownership documents needed. However, if you don’t understand the process, you can get necessary information from a professional first to understand what you are getting into to avoid future regrets. Many people have lost ownership of their homes through this process, and you can be a victim too, but if you’ve professional advice or guide, you can avoid making mistakes.
When selling a house, transactions involved are very high because you cannot do it alone. You need the help of a realtor or even a lawyer to make selling success. Real estate agents charge you 6% – 7% commission on sales making your moving an expensive ordeal. You may opt to sell the house yourself but if you are not a professional real estate agent, expect to have a lot of hard times trying to get the best deals and to sell your house. You don’t possess the skills and experience to expose your house to many buyers in the market, and you may end up taking a lot of time selling it. Also, since you don’t understand the market very well, you may give your house a price tag which is very high or too low ending up in a lack of buyers or losses respectively.
On the other hand, renters should understand that they don’t control their destiny like homeowners do. There are a lot of uncertainties associated with renting because the landlord may raise the rent after the end of a lease period making it unbearable for you. Also, the landlord may decide to sell his or her property leaving you with no choice other than to look for another home. In extreme instances, you may be kicked out of a property, but this is not very common especially if you are a good tenant. However, there are a lot of scenarios where you could end up paying more or looking for another home to stay in.
Owning a house has the benefit of freedom to do what you like with the property. As a homeowner, you can decide the colour of your walls, the type of tiles to install among other things. This is not possible when you rent because you may end up losing the house altogether. If you have a backyard, you can decide on what to do with it, and you won’t be worried you may lose your deposit or security money!
When you own a house, you are responsible for all the decisions involved because you are the owner. It is hence flexible to own a house because you may do all the upgrades you want to have in your home slowly. For instance, you may add a hot bathtub to improve your bathing experience. This is not the case when you rent a home. Additionally, you can make other improvements such as additional of a fence, driveway, etc. if you have money. Flexibility comes in when you’ve to solve a problem that you never intended will be e.g. a leaking roof. You will have to find a means of getting it done even if you did not have any money to avoid further damages.
Owning a home has its good and bad side too, but this depends on how you see it yourself. Before settling down on making a decision on whether to buy or rent a home, you should take your time to analyze the factors involved. Ideally, most people prefer owning their homes although it might be expensive it has a lot of benefits compared to renting.