Does it make more sense if you choose to rent or buy? Many argues that buying your own house is better than renting one since it is an investment and it is more stable. On the other hand, some would argue that renting is more convenient and low maintenance. Although both parties have their own points, there’s more to it you should be knowledgeable of.
There are a number of pros and cons both for leasing and buying, the factor you need to consider most would be your financial situation. To enlighten you with this dilemma, you should consider a few things first.
RENTING
Pros
Easier to move: If you’re just starting a career and you don’t feel like settling down for the moment, renting could be more appropriate as a choice for you. With this, it is easier to move and switch leases since you are not committed to the property for a long time in comparison with buying your own home.
Flexibility: Renting provides you the opportunity to look over and discover things that you might consider to buy the property or leave. If you are uncertain about the neighborhood or unforeseen job relocation, renting would be practical before you leap into the long-term commitment.
Low Maintenance: Or could be no maintenance at all. If you encounter issues with your plumbing or electricity, you can just contact your landlord and he’ll work out the problem.
Cons
Monthly payment hike: Increasing rents in cities is inevitable so you should expect a monthly payment hike once you contract lease ends.
Binded agreement: Since you are just renting, you have no power in customizing your home unless you get an approval from your superintendent. Even painting your walls or upgrading certain appliances needs approval from the landlord. The do’s and don’ts are stated in your agreement so any further requests desired, you sould consult your landlord.
No equity: When you rent, you are proliferating your landlord’s bank account since you’re paying his/her mortgage. This leaves you with no asset to invest or sell in the future.
No tax benefits: Renters do not have the privilege to deduct their housing expenses from their federal income tax. This trims down your homeownership status.
BUYING – Pros
Equity: By paying your mortgage, you are able to increase your degree of ownership each time you pay, your home becomes your asset. You can also have an option of refinancing wherein you can request for a favorable rate for your home to purchase other important funds.
Tax Benefits: Homeowners are able to deduct both their mortgage interest payment and property taxes This deduction compensates the house cost.
Customization: Unlike when you are renting, owning your home means having the complete power and control over it. You are free to change the design, structure and overall appearance of your home.
Home as an investment: If you already lived long enough in your home and plan on relocating, you can have your home available to rent. Choose a house that will generate good rental property in the future.
Cons
Maintenance: As a homeowner, you are responsible to cover you own maintenance needs and repairs. You may prefer a do-it-yourself approach or choosing your own contractor.
Cash Investment: To buy a home mean to save money for downpayment and other required expenses for homeownership. Meaning, the cash won’t be no longer available to other investments.
Additional costs: Being a homeowner requires paying rates, taxes, maintenance and insurance. This is one of the reason why people prefer renting that buying.
Whether you want to rent or buy, you should consider one important aspect: your financial status. You may prefer buying a house but can you handle the mortgage payment, property taxes and other homeownership costs? Maybe your profile suggests renting would work better as for the moment.
About Chie Suarez
Chie Suarez is a resident writer for RealPro, a licensed Real Estate and Business Agency. Chie usually finds herself accidentally stepping inside a home department store and open-house models.