Home is where the heart is! Definitely yes!
But, for most people the real confusion is whether to buy a house or to rent one – honestly, the confusion where a purchased house is just much a home as a rented one. Well, this is just one constraint that people consider, there are other points that need to be considered and checked as pros and cons between buying and renting the house.
This blog by Keys90 points out for you both the advantages and disadvantages of buying and renting a house; read until the end before so you may make the wise decision.
Buying a House/Apartment
- The value of a home is definite to increase over time and if you ever plan to sell it you can earn a profit on it.
- Buying a house makes it your legal property which means you can use it without restrictions that are otherwise enforced by the landlord.
- Whether you’re buying an independent house or an apartment buying the house would look like a long term investment.
- You have all the control on your property. You can change the look and feel of the property based on your requirements including décor changes, landscaping and renovations, to suit your needs and your style.
- Not only will you have a large investment to your name, but paying your monthly bond repayments on time will increase your credit score.
- You have the option of buying to rent which enables a Homeowner to generate income from renting out the property. This income can be put towards the home loan.
- You have the option to refinance your bond amount should you wish to withdraw a large amount of money to pay for major purchases.
- There is an opportunity to save money in the long term as there are possible tax deductions related to income-generating properties.
- Being a Homeowner comes with huge financial responsibility including bond repayments and home maintenance; remember you will be the only one responsible for it.
- There are additional costs to homeownership and these usually include rates, taxes, insurance, and maintenance for which the Homeowner is responsible.
- There could be a risk that you earn no profit through resale. The cause could be recession or higher interest rates; but whatever it is you have to deal with it on your own.
- Homeowner is likely to be dependent on selling their home before being able to buy a new one, and therefore it might take longer to be able to move homes once the decision has been made to do so.
Renting a House/Apartment
- Renting is a more flexible option compared to buying. An ideal option for those who could be facing sudden job relocation.
- Requires no long-term commitment from the tenant and is the best option for someone who doesn’t intend t stay in one place for long durations.
- Renting allows a possibility of living in an area in which you could not afford to buy.
- Moving out is easier for a tenant than a homeowner as there is no stress of finding someone to take over the lease or a buyer.
- The only insurance required by a tenant will be to cover the contents of the home, while all maintenance work on the property is for the Homeowner’s account, as is homeowners insurance.
- A tenant is bound by rules of lease agreement, which impact the freedom to use or renovate property.
- Before you can rent you’ll have to deal with a rental agent who will be the liaison between you and the homeowner. Since a 3rd party is involved the issues can take longer to resolve.
- A rented property is not an investment and you will never be have any control over it legally.
- You have no control on the annual rental fluctuations; these are directly affected by inflation.
- There is no guarantee what so ever that the lease can be renewed when it expires.
These advantages and disadvantages of both buying and renting a flat are important points that every person should have all the information about. So, now whether you’re looking forward to buying a house or renting one, these points will help you make the right decision.