It is everyone’s dream to live in an exquisite home, with attractive home features. However, Potential home-owners are always faced with the dilemma of choosing between buying and renting property. In as much as many individuals dream of owning a property of their own but such ambitions must be dealt with tactfully.
Nevertheless, these two forms of offer their own distinct benefits, depending on the individual and the condition at hand.
The drive to be a homeowner remains strong. It’s mostly about freedom: The ability customize your house as per your needs: to paint the walls whatever color you want, or know that a landlord is not going to raise your rent or ask you to leave, to change the roofing, etc.
Here are a few things to consider when deciding whether home ownership or renting makes better sense for you.
Reasons to rent
1. Flexibility – Renting allows you to explore an area before making the longer-term commitment to home ownership. Unless you are certain about specific neighborhoods, renting allows time for research and discovery.
2. Career uncertainty – If you think you might need to move in the near future or are mulling job changes that span several areas of town or are located elsewhere in the country, you might want to rent. Buying ties you down to a greater extent.
3. Income uncertainty – If you expect a pay hike or cut in the near future, that can change your borrowing ability as well as impact your ability to pay a mortgage.
4. You never incur maintenance expenses – When a pipe leaks or experiences blockage, you don’t call a plumber or purchase another one; No! its none of your business. You head for the telephone and call the landlord.
5. Utilities (sometimes) included – In some instances, the landlord may pay for many utilities such as water, sewer, garbage, and, in some cases, even heat and hot water.
The downsizes of rentals comes in because you may have no control over the fluctuation of your rent, a big-budget item that can change often. Long-term budgeting becomes more difficult.
Reasons to buy
Reasons to buy
1. Autonomy to customize -You like dozens of pictures on the wall? Well, hammer away — they are your walls now. Go ahead and paint them mango! Wish you had another room? Go ahead and add one.
2. Maintenance by choices– If you live in a house, you can decide how to approach maintenance, either doing it yourself or picking your own contractor. If you live in a penthouse or serviced apartment, you may pay a monthly fee to have maintenance work covered by the agency’s contractors.
3. When you pay rent, you are actually paying your landlord’s mortgage or adding equity to his or her bank account. However, when you have a home mortgage, you increase your degree of ownership in your home with every payment. A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value. In the event that equity in the home grows to more than a 20-to-80 percent loan-to-value ratio, you will be able to borrow against your equity in the home. This can be cautiously used should you need capital to pay for major purchases. If interest rates drop, you can refinance your mortgage at more favorable rates, or, once you’ve paid the entire mortgage off, borrow against the equity in your home to fund major purchases such as a second home or your child’s education.
4.Tax deductions- You can deduct mortgage interest as well as your property taxes.
While a home is a good investment — and let’s face it, you have to live somewhere — many financial experts caution against purchasing a home simply as an investment. Historically, the real estate market increases have been slow and steady.
Is renting cheaper?
Although this question is sometimes, difficult and hard you can always get answers. Whether renting or buying is more cost-effective depends on your market, where you choose to live and whether you like to do home improvement and maintenance projects yourself.
Homes cost money: Appliances break, roofs leak, and if you own, you are the lucky soul who gets to pay the bill. If you are renting, landlords pay the plumber and roofer.