At a certain point, people start to ask themselves whether it is better for them to rent a home or own one. This is certainly a point of inflection for young couples as well as burgeoning families, especially those who are seriously considering making a change in their finances as well as their future as a whole. Renting Vs Buying is the ultimate choice, and before making the final decision, it is necessary to understand the pros and cons of both options.
Pros of Renting
• No Long Term Obligations– Most home and/or apartment leases only last up to 2 or 3 years (maximum of 5 in rare cases), which indicates the lack of long term financial obligation on your part. You always have the option of moving to another place when your lease is up, which also allows for flexibility in your living arrangement.
• Property Maintenance is Covered by the Owner not the Tenants– Such concerns as toilet clogs, leakages, rotting wood, blown fuse, creaking stairs, and many others remain to be the responsibility of the property owner/landlord as opposed to the tenants. You need not worry about proper maintenance or repairs because everything is taken care of by the building/property manager or the owner, at their cost.
• Easier to Get Approval for a Lease than a Mortgage– Regardless of the state of the country’s economy, or one’s credit score, it is always easier to get approval for a lease than obtain a mortgage. If you are in need of housing fast, renting a property is certainly a more favorable aspect.
Cons of Renting
• No Future Financial Rewards– Renting is all about spending money, instead of investing it. In some cases, the monthly rental fee is almost as much, if not more than what will pay in mortgage. This means you are basically throwing away money when you can actually save some of it for future gain.
• Property Limits– Most landlords establish certain prohibitions when leasing out their property. Some of the common restrictions include no additions or home improvements (including painting), no pets, no gardening, etc. People who rent homes or apartments will have to abide by these restrictions and are therefore limited as far as their use of the property.
Pros of Buying
• Property Control– Owning a home means you get to decide how you want to utilize it and what you wish to do to improve its current state. In addition, you get to make a choice whether you wish to bring in pets or not, or how to landscape the outdoor area. Being a property owner certainly afford certain liberties that are just not possible when renting.
• Future Financial Gain– Assuming your credit rating is well maintained and you do not have any significant debt other than the mortgage, it is very possible that owning a home will allow you to save money in the future. Once you own your home free and clear, it can be a valuable asset that you can use as collateral for a business loan or whatever financial venture you wish to explore.
Cons of Buying a Home
• Extreme Financial Stress– Some people just barely qualify for a mortgage, which is never a good place to start. Those who are not quite prepared for the financial burden that comes with taking on a home loan might find themselves in deep trouble; especially if/when, they cannot make the monthly mortgage payments.
• Limited Choices– While owning your home affords certain freedoms; it can also be a reason for you to be tied down. Paying a monthly mortgage means not having much choice as to your living situation (at least until you pay off the loan). Moving to another location can be a problem especially if the real estate market is down and you cannot sell your home right away.
Renting vs. Buying- The Verdict
Both choices have its own benefits and drawbacks. When deciding whether to continue renting or purchase a home, it always boils down to the question of your financial readiness. Be sure to crunch the numbers before you make the final decision since it can determine your financial future and that of your entire family.