one needs or wants to move around a lot, then buying the house is not for them.
Renting the house will be the best alternative they can have. However, if
someone plans to stick around a particular location for serving the long term,
the only reasonable recourse is buying.
it all depends on the demographic factors, predominantly, the income of the
family which determines whether to rent or buy a house. Are you going through
the same dilemma? Below we have discussed some pros and cons for both buying
and renting the house.
Pros of renting a house:
Better and greater amenities: As a renter, you will have access to desirable and useful facilities such as a fitness center, swimming pool, parks, etc. whereas if a homeowner wants to avail such amenities, he/she will end up paying hefty amounts for the installation and maintenance costs.
The Dictum in the interest of tenant: Most of the time people encountered with the set of circumstances where they need to get something fixed. In such a situation, they may call the landlord and get it fixed quickly rather than handling it by themselves. So, one finds no worries to get the things repaired or modified.
Flexibility: Are you a frequent traveller? No worries. With rental housing, you can advance towards your desired place when your lease expires. Consider you are impending to get a wishful job then renting makes it effortless and unchallenging to move to a place that best fits your needs.
Additional Investment: Renting helps you save your money in other ways which you can later invest elsewhere.
Cons of Renting:
No ROI: Since
the property is not legally yours, hence, you are no one to acquire any return
on investment or wealth creation. Instead, you are paying towards lender’s
Rent keeps going
up: The same area footage will get more expensive with the time than when
you own since you have no control on rental fluctuations caused due to
restricted: You, as a tenant, are bounded by the rules of the lease agreements. Generally,
landlords don’t allow their tenants to renovate the house as per their
preference and this, certainly, will create an immense impact on your freedom.
Pros of Buying:
It’s not yours until you own it: I have noticed some incidents quite often where families who lived in a house for the years on the rent are forced to get evicted. The reason is simple i.e. they don’t own it and the real owner decided to sell. The owner doesn’t care how much feeling you have attached to the house. If he has decided to sell, he will sell it.
You can re-model your house in any way you want: You have the freedom to renovate and decorate your home as per your desires. Ain’t no stopping you from doing that. It’s your legal property which allows you a considerable amount of freedom in its use without any restriction.
You possessed a valuable asset: You possessed an asset which has a future value. In case, if someone buys a house with a mortgage, no worries because one day he or she is entitled to become the absolute owner after paying back their loan. Deliberating the long term benefits, owning home results in security, equity and potential growth in personal wealth.
Opportunity to save money: There is a desirable and effective opportunity to save the money which you would have spent on your long term rent.
Cons of buying:
You will have to deal with the maintenance, insurance and security: Unlike renting a house, you are the sole responsibility for maintaining your house and borne all the expenses on your own. Maintenance on a property you own is an uphill task. Council rates, water service rates, land tax, etc. all will create agony to the individual. Likewise, you would become a part of colossal down payment.
The Property takes time to convert: With effect from 8 Nov, 2016 i.e Demonetization, the property has become very illiquid and is down to the great extent. So, it will take a good amount of time for the property to give good results. Considering the worst case scenario, if we are in a position to shift to some another place, then it would be an uphill task to do so.
The below data depicts the ratio of property prices
and rents increased across different cities (as per 2019):
To get more insights on the analysis of whether to rent or buy a house from the top realtors, click here.