Renting VS buying is a debate that has no end. It has no universal answer that can satisfy all. Owning a home is a dream of the majority of people. But either of the options has its own pros and cons.
The evaluation of the advantages and the responsibilities that come with either helps figure out whether to rent or buy a home. By comparing different aspects of each, one can decide which suits him the best.
Here are the pros and cons of home rentals and home buying to help you conclude.
Renting a Home
The property rates are constantly increasing, and so home rentals are more preferred by millennials. Without blocking a massive chunk of funds, one can get a desired home with the amenities by renting. The pros and cons are discussed below:
Pros of Renting a Home
If you plan to rent a home, the benefits are:
- Low costing
As compared to buying, renting is inexpensive. There is no need to invest an amount in a down payment or even seek a mortgage. Home rentals are the best option as it involves payment of rent and initial booking amount, with the expense of utility bills.
- Flexibility and Freedom
In terms of flexibility and freedom, rental houses stand in a superior position. The flexibility allows the tenant to shift the house in case of a job transfer or rental issue. Simultaneously, freedom to change house depending on need, home rentals are best.
- Low Maintenance Responsibility
The tenant does not require the maintenance expense concerning the property. Only the utility bill payments are required from the end of the tenant, whereas the property maintenance cost is not a point of worry.
Cons of Renting a Home
Nothing is free from disadvantages, and so is renting a home.
Home rentals come with instability, as the landlord can serve the eviction notice to the tenant changing the homeownership in no time. The fundamental issue here is the safety and stability of having a home. Additionally, one can face some restrictions too.
- Lack of equity
There is no ownership. With the absence of long-term benefits that can offer benefits during retirement or can help create wealth, home rentals fail to build equity, no matter what the property value is.
- Lack of tax benefits
The tax benefits that are enjoyed by a property owner lack in home rental cases. The tenants pay the monthly rent cycles and utility bills, but the deductions in terms of tax benefit are absent.
Buying a Home
Owning a home is no less than a dream. Where home buying seems a lengthy and expensive process, the dream to design and buy a home of your own is of all. Although, it comes with pros and cons of its own, which are discussed here.
Pros of Buying a Home
The pros of buying a home are:
- Wealth Creation
House is a great asset. The home bought today is not only a place to live but an excellent investment for the future. One can sell the home in the future and can earn a decent amount of profit.
- Tax Benefits
When the home is bought against a loan, the mortgage interest is entitled to deductions to earn the tax benefit.
- Freedom of Design
A dream home is one that is with the color and design of preference. The freedom to choose the design and renovate the house is possible with home buying options only.
Cons of Buying a Home
The cons of buying a home are:
- Blocking of Funds
When buying a house, a considerable amount of money needs to be invested. It results in the blocking of the funds and also reduces the liquidity at hand. In case of a high amount of funds, the same can be received when the house is either mortgaged or sold.
- High Maintenance Cost
The consequent cost of upkeep of the home and the property maintenance cost, fees, and expenses on any kind of repairs is high. To maintain the home at the best, the amount that needs to be invested is substantial.
- Mortgage Rates
The financing needed to buy a property is high, and in such a situation, a loan is required. The associated cost of mortgaging and the interest rates may be high. The miscellaneous cost increases mortgage rates as well.
Are you still wondering whether to rent or buy a home? If you intend to stay in a space for an extended period or rather permanently and are looking to design a home of your preference, then opting for home buying is better. A good credit score that allows you to arrange for a mortgage and availability of funds are factors favoring buying a home.
If you are not planning to stay for long and are in a profession that demands transfer, going for home rentals are a good option. Also, when the credit score is low or the availability of funds for a down payment is lacking, then deciding to rent is better.
Ultimately, a final decision of renting vs. buying is situational, depending on various factors. Have a close look at choosing the best decision for you.