Homeownership does not come easy, especially in these harsh economic days. As a matter of fact, choosing to buy a home or rent is a serious decision that may affect one’s financial health and lifestyle. What I know is that real estate ownership is one of the rewarding investments with high returns. It is also likely to promote equity and help in tax reductions.
Renting, however, comes with its share of tribulations which may include flexibility with almost zero responsibility. What this means is that renting allows me to move to another house without much of a struggle. At the same time, the responsibility of taking care of my rented house lies squarely on the shoulders of the landlord or the assigned real estate agent. My only task is to pay rent on time.
It is always wise to know that acquiring a home permanently isn’t better than renting. On the other hand, renting isn’t always an easy option for many people. Let’s compare and contrast owning a home and renting one.
Renting a House
The best thing about renting a home is that I can move to another place of house without penalty provided that I honor the lease agreement. The downside of renting is that the landlord can decide to increase the rental rates on short notice. Alternatively, the owner of that rental premises can decide to sell or turn it into condos.
Some people’s opinion about renting an apartment or home is totally different from what I think. For them renting is more or less the same as throwing away the money on a weekly or monthly basis. I tend to disagree with their notion since rental homes and apartments provide a quick means of securing a place to stay.
Well, it is true that renting a house is far from building equity but I’m sure most of the expenses that come with homeownership do not necessarily lead towards building equity.
Another positive aspect of renting a house is that I will have an idea of how much money I will be spending on that particular house each month.
While this is contrary to owning a home, it should also be noted that homeowners experience additional expenses on repairs and routine maintenance of their structures, which the insurance might not consider. This makes renting a better option since I will only strive to raise the monthly rent rather than struggle with occasional roof repair, windows replacement, and other costs that pop up occasionally.
The unpredictable nature of rent increments is a major problem that tenants face each time their lease agreement is renewed. Such cases are common especially in places where rental houses are in high demand. On top of that, there are insurance premiums and property taxes that may affect the cost of renting an apartment regardless of whether there are fixed-rate mortgages or not.
Even though homeownership is touted as a sure way to create wealth, some homes can still lose their value. This happens in places where there is a sudden decline in their popularity. For instance, a major employer or company may shift to other areas, leading to a considerable population decline, which in turn results in a surplus of homes. Another problem could be a construction boom for the residential houses, which could possibly keep or lower the prices down.
Owning a Home
More often than not, we tend to believe that buying homes relieves us from the financial burden of paying rent. While this is a more sound financial decision and key to our happiness, it is also a booming business for nearly everyone. Homeownership promotes mortgage lenders, home improvement stores, and real estate agents. It’s simply a cultural mindset that motivates many people into working hard to have a place of their own.
There’s more to homeownership than just renting a house. These benefits include stability and being part of a community. Not to mention the pride of ownership. Owning a home also eliminates the nomadic lifestyle and restlessness.
Unfortunately, the overall cost of owning a home tends to be more than the overall cost of living in a rental house. Some of the expenses that come with homeownership include:
- Trash pickup
- Property taxes
- Water, electricity, and sewer service charges
- Pest control
- Repairs and maintenance
- Tree trimming
- Homeowners insurance
Although the above-mentioned expenses may vary from one homeowner to another, they may turn out to be a little costly compared to paying rent for a given period. But the most expenses come in the form of mortgage interest which may constitute monthly payments in the initial stages of a prolonged mortgage term.
Once I add up all these expenses, I find out that I’m better off financially when I rent a house than acquire one. This is only applicable on a short-term basis.
The Verdict
Whether you opt for renting or owning a home, rest assured that this is a personal choice. It is never always about money but your comfort, security, and your vision. Take a while and weigh the risks involved between renting and owning a home to make a sound decision After all, a home is one of the basic needs for human beings.