Today, having a house is a liability for many people. It restricts their lifestyles and is also a significant financial outlay, whereas renting is easier and less expensive. For others, having a house still provides security and comfort, as well as a sense of prestige.
Purchasing a home is a significant life event and financial milestone for many people but how can you know whether you should stay renting or buy a home? The simple answer is that if you can afford a down payment on a home that will likely rise in value and expect to keep it for at least five years, you should do it.
In this article, we evaluate the benefits and drawbacks of owning a home against renting a home, as well as why each choice is better or worse.
- The flexibility of personalization
Personalization is possible when you own a property. It enables you to add those personal touches that make a property seem like your home. Put up as much wallpaper as you like or as many decals as you want. Some people find luscious freedom enticing. It does, however, come at a price.
While a mortgage payment may be less than rent, house ownership comes with inescapable additional costs such as upkeep, taxes, utilities, and other minor overheads. They’ll inevitably appear at some point, and you’ll be exclusively responsible for maintaining the house in good repair. When you rent a home, your obligation stops when the rental payment is deducted from your bank account. Is there a leak in the faucet? Is it a peeling plaster? All you have to do now is contact the home’s owner.
- The flexibility to move around
We all desire a sense of certainty and security. Buying your own house delivers that in abundance, and it’s also emotionally fulfilling since it gives you a sense of belonging.
However, rootedness has the potential to bind. Having a home results in the formation of a community and a way of life. Many people dislike upsetting their tiny worlds, and this might prevent you from exploring for better positions elsewhere. Renting provides the much-desired flexibility of being able to relocate at any moment when a great work opportunity arises. All you have to do is pack your luggage if it’s in a different city, or even a different country. Renting provides the much-desired flexibility of being able to relocate at any moment when a great work opportunity arises. All you have to do is pack your luggage if it’s in a different city, or even a different country.
- The availability of peace of mind
When you own a house, you have stability, which contributes to your mental well-being and general connectivity. There are no landlords or owners pressuring you to leave without notice, and there are no leases or contracts that are unreasonable. With a rental house, on the other hand, you won’t have to worry about coming up with a large sum of money up front, trying to ensure your credit history is clean in order to secure a loan, or taking on a large burden.
- The elimination of risk
The elimination of numerous risks is one of the key reasons why individuals tend toward house ownership. However, owning a home comes with its own set of difficulties. Two of these are price depreciation and a sluggish market. Most of us buy a property, especially our first one, with the intention of just being there for a few years before moving on to our ‘forever’ home. If the property market is not extremely active at the time you want to sell, you will lose money and experience a lot of stress.
Then there’s the issue of your house not being truly yours until your mortgage is paid off. It technically belongs to the bank, which might confiscate the property if a foreclosure is required, leaving you with no home and no money, problems that can be avoided.
Renting vs. purchasing isn’t a one-size-fits-all situation.
Ultimately, the choice of whether to rent or purchase a house is a personal one. Renting isn’t always “throwing money away,” and buying a house isn’t always a wise investment. It’s all about figuring out what’s best for you and your scenario. So always weigh your options & then make an informed decision.