The question of whether it is better to buy or rent a property has been something people never get tired of debating. Everyone has an opinion, including the so-called experts, and every opinion has its merits. There are pros and cons on both sides of the argument. It is important to know what these pros and cons are before you begin your journey of acquiring a home. Once you have a better understanding of the differences between buying or renting you will be in a better position to know which of these options will work best for you and your personal circumstances.
There are many things to consider. You want this to be a positive move. You want to find yourself in a place where you feel safe and secure, like you would if you were investing in some other important venture or, indeed, if you were playing at a Grande Vegas online casino USA.
The Advantages of Renting a Property
Low maintenance costs
One of the biggest advantages of renting a property as opposed to owing it, is that you are not responsible for the upkeep and maintenance that goes along with it. It is basically a low maintenance option. When something needs repairing, you call the owner and it is generally he or she that needs to deal with it, be it the roof or some other issue of maintenance.
Obviously, you do need to have a contract in place which states very clearly what the owner and what the renter is responsible for. It is possible that a landlord can add certain clauses that will enable them to raise the rent in case of added costs because of maintenance. It is in your interest to have the contract looked over by a lawyer before you sign it to avoid any surprises later on.
If you don’t like to stay in one place for long periods of time then renting could well be a good option for you. It is possible to negotiate a shorter, rather than longer, term lease and therefore you are free to up and leave whenever you feel the urge. If you own your own property it is less simple as you will have to sell your property before being able to move and, sometimes this can take a considerable amount of time, tying you to the place.
Lower overall costs
Mortgage payments are likely to be higher than the rent you would pay, especially for a smaller apartment. You can literally save huge amounts of money each year by renting. When you buy a property there are all kinds of added costs that don’t apply to renting a property. Of course, there is the mortgage which will include the interest and other related costs in acquiring the mortgage like property taxes.
But there are also a variety of insurances that are required, from life insurance on the mortgage, to flood and other home insurances covering structure and other possible issues plus perhaps community fees. When you are renting these are generally things you do not have to deal with at all.
Disadvantages of Renting
Inability to do any home improvements
As a rule of thumb, renters do not have the possibility of making any real changes to the property. This can also mean that you are not allowed to change the paint color on the walls, let alone making any more serious changes. Any fixtures or fittings that are in the property are likely there to stay and you have little option but to work around them.
Also adding shelving or ceiling fans which need to be secured are likely not possible. Of course, it is possible that your landlord would agree to you making some upgrades to their property by putting in new kitchen cabinets or changing the flooring but this would likely be at your expense and you will not see any of this money returned when you decide to leave. The property owner will gain the benefits of the upgrade once you leave and can raise the rent he receives.
Paying towards someone else’s property
One big downside to renting, is that you are helping someone else pay for their property instead of paying towards yours. Each time you pay your rent you are enabling them to get ahead and pay for their investment. Property is an asset and gives the property owner the ability to sell it at any time. As stated earlier, they will also benefit from any improvements you make to their property and, unfortunately, you will need to walk away without any renumeration.
Advantages of Purchasing a Property
Tax deductions on mortgage payments
One of the biggest advantages to having a mortgage is that there are huge tax benefits. Having a mortgage allows you to deduct 100 percent of the interest you paid on the mortgage in any year. Basically, every dollar you pay in interest on your mortgage is considered tax deductible. This can be a huge saving and is definitely an incentive for many to buy a home rather than rent.
Property as an investment
Buying a property is an investment. It doesn’t belong to anyone else and is yours; it is an asset. You can do with it as you please. It is yours to renovate or remodel, to sell or to rent out to tenants. The choice is yours. Having paid off the mortgage you will be the sole owner of the property. You will need to continue paying home insurance and the relevant property taxes. If by some happy chance you are able to pay cash for your property then you are well ahead of the game.
As it is your property you are basically free to do anything you like to your property, albeit with the correct legal planning permission in place or recognizing any other clauses in your deed of entitlement. You can get creative and refurbish the whole house, adding bedrooms, bathrooms, or building a bespoke kitchen if you wish. If it is your house, you are free to choose, and just need to acquire the required local building permits to carry out the work.
Disadvantages of Buying a Property
When you are the owner of a property you have no landlord to turn to in order to get things fixed and repaired. You, as the owner are in charge of all maintenance. When there is an issue with the electrics, the plumbing or the roof it is you who are responsible to take care of the problem and to pay for the repair. It is not just when things go wrong either. Things need to be taken care of, be maintained, in order that they don’t breakdown. It is important to keep on top of things and everything costs money. For these reasons, owing a property can be an expensive venture.
It is, of course, possible to move to another area if you do own a property but it is not a case of just getting up and moving. If you have a mortgage, you will need to rent your house to tenants or sell up in order to not fall behind with payments. Whatever you decide, it may prove to be quite a lengthy procedure and not that easy. A lot will depend on the housing market situation, what time of year it is and perhaps other factors.
Instability of the housing market
At some point you are likely to want to sell your home. Most people do move several times during their lives and don’t remain in the same house. You may make some money on the sale but it is possible that it will be worth more or less what you paid for it. If you have to pay off the remainder of your mortgage and pay real estate and legal fees you may not make much on the deal, if anything.
You need to weigh up all the pros and cons of renting or buying. Your decision will depend on your personal circumstances, whether you are married, divorced, have a family or if you are going through some difficult life situation. Owing a property is an added responsibility but at the same time a good investment. Think wisely about where you are in life and what kind of lifestyle you aspire to. Owning a property is an enormous commitment but as we have seen there are merits to both renting and owning. The decision is yours.