Should you rent or purchase ?
Should you buy a property or rent one? Check out both the benefits and shortcomings of renting and buying and then decide whether you want to buy or rent a property.
Why should you buy a property ?
Each and every one of us dreams to have our own home which we can design, build and manage in the coming years with our loved ones. This gives a feeling of achievement and steadiness to them. Regrettably, not every one can buy a home for themselves because of the high real estate prices. On the other hand, there are few people who do not have the determination and commitment to have their own home so their resort to renting an apartment. These people are not willing to give up their freedom and time. So purchasing a home requires a person to consider not only the monetary factor but also the priority and the outlook of the buyer.
- Security: If you have a place where you can call your home then you as well as your family would feel secure and it is also convenient. If you want to decorate or restore the house, you can do it easily without worrying about the leasing terms. Moreover, you do not have to fret about the high-rising cost of rent.
- Investment: The value of real estate properties is always on a rise. This will enhance your equity that you can use to secure additional loans for retirement.
- Saving plan: If you buy a property then you will have to save your money to pay off the home loan. It would be like you are making yourself save certain amount from your income to pay for your dream house.
- Standard of living: When you buy a home you can decide on the décor and design for your home which will suit the way you live. This is one of the reasons which make people buy a property. On the other hand, it’s not only waste of money but your time too if you decorate the rented place because you will be giving it up after the end of the lease period. You may not be permitted to alter anything in the rented place. If you own your own place then you can change anything you want in any way you want. You may also enjoy appreciation in its market value.
- Tax incentives: If you are buying the property as an investment then the interested added on the monthly repayment of the mortgage is deducted from tax. You can benefit from this if you are planning to rent the property.
- Position: When you own a really nice place then it is the indication of power and money. Having such a position will give you advantages and one of the benefits is that your credit rating would be high. This would help you borrow money from financial institutions and banks.
- Great effort to save money: It can be tough for you to have to safe sufficient money to pay for your dream house as you would have to economize and save every single cent. You will also have to alter your lifestyle considerably. Your view of life can be altered due to saving for months or years continuously. You will need to cut down on luxury meals, costs for vacationing and perhaps you may also be required to use public transport to save gas.
- Huge expenditure: Buying a house means incurring huge expenditure rather than paying the rent every month. Moreover, you will have to incur expenses on council rates, taxes, insurance, repairs, maintenance charges, etc. You will notice that such expenditures take away a huge portion of your earnings. This will be very taxing for you.
- Depreciation in value: No matter where we are investing, there are always risks associated with it. This is true particularly in terms of price because you can not control it. An event may lead to the decrease in the market value of the property and if you are thinking of selling off the property then you will be losing money.
- Rate of interests: Unless it is specified, the interest will increase every year. If you are finding it difficult to pay the mortgage every month then it would be tougher for you to pay it when the interest rates increase. In renting also the interest rate will increase but you are able to get some concession from the landlord after talking to him or you can rent another home.
- Location bound: Some people are nomads which mean that they are not able to stay in one location for long. Some people do this because of their career while others do it because of their lifestyle. Few people do not like stability because it means losing their independence. Relocating will mean that you will have to incur more expenses but it would be equal to the transaction costs which you incur in purchasing or selling the properties every few years.