Should I Buy or Rent: Pros and Cons
At a point in most people’s life, they are faced with an intimidating question. Should I rent or buy a home? His/her finances might be in a solid state, but he/she might be wondering whether it would be smart aka cheaper to rent or buy a home. It is important to understand that there is no universal yes or no answer to this question.
After understanding this, let us take a look at the pros and cons of renting as well as the pros and cons of buying a house to live in.
Pros of Renting a House
When you rent a house, these four pros are usually what most people look at:
- You have the freedom to move as and when you’d like to
- You don’t have as much responsibility compared to if you had bought the property
- You have fewer expenses as some of them might be paid by your landlord
- You have the ability to take your money and put it into other investments
The money you pay your landlord each month is typically less than the current cost of a mortgage. This is all assuming that taxes, maintenance, and insurance are factored in. There’s also a sort of psychological freedom you experience in renting because you aren’t trapped in your house for 30 years because of a mortgage.
Cons of Renting a House
It’s not all sunshine and rainbows. There are some cons when it comes to renting a house:
- When you do decide it’s time to move, you walk away with nothing.
- Usually, you’re stuck in a lease
- If the owner sells the property, you might be forced to move somewhere else
- Sometimes, you might face a lot of restrictions
Renting is usually temporary, and people who are looking to start a family might want to establish a household. Renting is usually not the best way of achieving that goal. When you rent, you might also be very limited in what you can do. Examples of this are that you might not be allowed to paint the place or have pets.
Now that we’ve looked at the pros and cons of renting a house, let us look at the pros of buying a house:
- The main reason which makes anyone want to buy a house is that they own their house.
- It’s your rules and yours alone
- A house is usually an investment which means that you rarely lose money on it. This translates to building personal wealth
- It sometimes is cheaper to buy a house rather than rent one
The most obvious advantage of buying a house is that you gain home equity. In many markets across the United States, owning a house might be a cheaper option than renting a house because of low-interest rates. There are also many cases where a mortgage payment has been lower than what a landlord asks for rent.
Cons of Buying a House
There are a lot of disadvantages to buying a house too. Let us look at a couple of them.
- There are a lot of hidden costs that are involved
- You have much more responsibility as well as liability
- Sometimes its more expensive to buy a house than it is to rent a house
- If you want to move, it is harder to leave
The first main disadvantage to buying a home is that you must come up with a large sum of money which will serve as your down payment or to buy the property outright. Rent is much simpler; you only need the first and last month’s payment.
There are plenty of pros and cons to buying or renting a home. Do your research and decide what works best for you depending on your financial situation.