This is a debatable topic to talk about. It depends on person to person, though a lot of people prefer buying a home. The choice of whether you buy a home or rent a home affects the money you spend or save at the end of the month. It also affects the lifestyle and living standard you choose to follow. People buy homes even though they are able to rent homes easily. Similarly, people who rent homes do it because of the flexibility and minimal responsibility they face in a rented home. Even though the sum of all the amount spent on rent might have gotten them a new home.
When you compare the two options, the buy a home option looks better. Here are the pros and cons of buying and renting a home.
Buying and Renting: Stability vs. Flexibility
Owning a home gives you a sense of belonging and stability. Buying a home is more like making a place in a community. It gives you security and a sense of belonging. However, if you are the type that likes to move around and explore the world, then renting is ideal for you. If you love traveling and exploring different places, buying a home and selling it off might not be a good idea. Housing markets are unpredictable and you could sell it off at a loss if you decide to move. Changing your mind on where to live can cost you more than owning a home.
Renting a home can be of an advantage too, renting a home means less taxes and you can move anytime without any penalty. But the disadvantage is that you will have to move suddenly too if the landlord wants you to move out.
Which one is a Waste of Money?
A lot of people believe that renting a home is a waste of money. This is wrong because when you need to live in a place, you have to pay for it. It correct to say that renting a home doesn’t add to any personal saving. But the cost of buying a home is huge. The overall cost of owning a home is quite high and it usually is higher than the cost of renting a home. However, if you sell a home over a period over time you tend to make more money.
The costs of maintaining a home are much higher. You will be charged taxes too which a person on rent doesn’t have to pay. Renting a home is better if you look at it in terms of expenses. You don’t have to bear the cost of maintenance, you don’t need to pay property taxes. You also don’t need to pay a huge amount of money upfront to rent a home.
Financial Predictability
When you rent a home, you know exactly how much you’ll be spending. You don’t need to pay maintenance charges, you just need to pay the utility bills and regular monthly rent. You don’t need to pay a heavy down payment either. Your monthly expenses tend to be predictable when you rent a home.
As a renter, you tend to face an increase in rent, on a yearly basis or as the agreement the home owner might have set. There is also some uncertainty, you might be told to vacate the premises if the home owner wants you to.
A lot of people believe that owning a home means it will add wealth. A home is considered to be a sign of being wealthy in many parts of the world. A home can also decrease in value. There are several factors that could make a home lose its value. It could be due to government policies or lack of infrastructure around the area you own the home in.
The decision about renting a home or buying a home is completely based on finances. Many people believe that buying a home is better than renting, but this totally depends on finances. Buying a home is better if you want to raise your children in one place, it’s a good idea if you want to spend your life in a particular community. Renting a home on the other hand is cost effective, but if you are the sort that loves to travel it probably not the best thing for you then. The decision of buying or renting a home is equally an emotional one too.
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