Should you buy or rent a home? Check out the difference

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Should you buy or rent a home? Check out the difference

 Should you buy or rent a home? Check out the difference
Image source: © Sarawutnirothon |Megapixl.com

Highlights

  • Owning and renting a property come with their own advantages and disadvantages.
  • No matter which option (buying or renting) you choose, it should depend on your lifestyle and financial situation.

Buying a house is the first dream of any individual but it requires proper planning and on-ground research. However, there is a section which believes that renting a property makes much more sense for the buyers who can’t afford payments and associated costs.

No matter which option (buying or renting) you choose, it should depend on your lifestyle and financial situation. But there are things which make buying and renting a house distinctly different. Before you go ahead with your decision, read the entire article and plan accordingly.

Buying a house

Owning a house gives many tangible and intangible benefits to buyers. The sense of security and the pride in homeownership is altogether a different experience.

While rent payments can’t create any physical asset, paying EMI can help in increasing your proportional ownership of the house.

As you know, a real estate investment has potential for capital appreciation and tax benefits.

But owning also has some disadvantages.

The overall cost of homeownership is higher than renting a property of the same value. There are a few major costs associated with owning a property:

  • Property taxes
  • Mortgage interest
  • Utility taxes
  • Homeowners insurance

Renting a house

It is not absolutely true that a person renting a property is just paying for something that he would not own ultimately. After all, you need a place to stay. There is no other option for a person with irregular or low income but to rent a property.

A tenant doesn’t have the feeling of extended liability associated with the property. Owning a house with a mortgage can overburden a person with EMI payments, house tax and other legal issues.

The other advantage of renting a property is that you can rent closer to your work and save transportation costs. Not all can afford to buy such prime properties or take risks or responsibilities of homeownership.

If there is not much room for property price appreciation, renting is perhaps a better option.

But, renting also comes with some disadvantages.

A renter should always be ready for rent increases at the time of lease renewal. It can be steeper too, depending on property rates in that particular area.

Renting means you could be asked to move suddenly if your landlord decides to sell the property.

Bottom Line

While both buying and renting have their respective advantages, it is always better to weigh the cons also and compare accordingly.

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