Home is where we find peace, love and happiness and it could be nestle in any sort of building made of brick and cement called house. A general trend pursued by several countries around the world in 2017, through generic surveys have resulted in to that people are more inclined towards the rented property than actually buying a house for themselves and their family for the most obvious reason of it being more inexpensive and affordable.
Surveys also say that this has happened because of the inflation and price hikes of the properties over the years, while the general income of the bread winner of the house is the same. These price hikes are not the same everywhere but how many people can go and find a house in a specifically cheaper area and location; which is why people tend to find their own personal favorite location and rent a house over there instead of buying a piece of land/house.
Look at it from investment perspective
Soem time ago, the strongest argument against renting of a property was that you are actually going to burn your money that you are paying as the rent, every month, but this argument alone cannot win the battle any longer because whatever way we opt these days for acquiring a house, it is extremely expensive anyway. It is true though that renting will get us a house for the time being whereas a house or property once bought, it will turn up as a good investment for future.
Similarly, it is not a cup of tea to invest in a property of your own. There are numerous charges regarding mortgage repayments, interests, insurances, installments, deposits and payments before possessions. This whole process takes a very long time to complete and what if you need a place to begin living in right away? A rented house has only few papers to fill in and within a week you can get your own place to live in.
There is another misconception, when people are selling their houses that if they will renovate it or remodel it in any way then it will bring them a better price from the buyers in the market, as house improvement will increase the value of the property. In many cases it is better to not spend on the house further if you are giving up on it for reselling.
According to many researches and analysis, following are the pros and cons of both renting and buying a property for you to decide for yourself about which option is most suitable to you:
Advantages of purchasing your own house or property
- Since your property is in your name, in case you buy it, then because of your investment, you get an increased benefit over the period of few years through credit scores.
- Within few years, if you wish to reinvest from the capital you used for your own house then you can sell in better price and refinance everything around it leaving you with a good sum to carry on with your further investment.
- People still consider it to be the safest investment when you purchase a property or a house because it is bound to bring profit to you because of the natural capital growth.
- You can make more rooms or resell your property whenever you have plans of relocation or making room for more in the house.
- You can even put your house, a portion or even a room on rent or lend it to bring you some material benefit and provide you the security of cash money even if you are out of work.
- With the inflation and properties price hikes, the property/house that you once purchased in cheaper cost will most definitely end up selling at higher value.
- It also provides you more security in your bad or rough times through the mortgage value of your property.
- The ownership of the house gives you proper leverage of how to decorate, use, renovate or redesign it as per your own personal requirement and desire without the hassles of the permissions from the property owner. You can turn it into your dream house with modernized fashion strokes.
- Your own house is not only a fashion statement, it also provides you your own permanent address, your own most cherishable place with endless memories for years and years to come.
- Buying a house means getting a member of the family because you take care for it just like a member and when your kids grow up and go away, they still like to recall it and return to it, time to time, to cherish their childhood memories in this same house.
Disadvantages of purchasing your own house or property
Since all the things in the world have two sides, similarly our options of buying and renting also have both the pros and the cons to consider. Following are few of the disadvantages that should not be forgotten when weighing your options to buy a house.
- The worst disadvantage of owing a house is that you can’t quickly relocate yourself in another place or city as you’ll obviously have to sell the current house and buy another one in another location but as easy as it is to say it as difficult it is to execute it because selling a house immediately is not easy. Even if you get a buyer right away, he will buy it below the real value of the property leaving you in an immense loss.
- Another disadvantage of buying the house has to do with the regular price hikes of the property. Previously, the first and initial deposit on the property was pretty economical that the buyer could pay and get the house in his name and then keep paying the installments till the possession. But now, the initial deposit itself is a hefty amount and a buyer has to save up for quite a time to be able to start the process of payment on his own house.
- The value of your property depends on the location and area as well. In a few years time of your purchase, the value could undergo a decline in the market because of the construction around it or could even go higher because of it. But this uncertainty seems like a gamble, less would invest into.
- After the deposit, you also have so many other expenses to make, which seems to be a burden on a person who has hardly saved for an initial deposit too. Expenses may include the general costing on stamp duty, legal fees, renovation, conveyance fee, maintenance fee, land taxes, council fee, insurance, water rates and mortgage repayments etc.
Advantages of renting a house or property
- 1st and the foremost advantage of renting a house is that you are a free bird. If you ever want to move out and relocate, you can easily pack your stuff and move out without having to worry about the resale of the current property. You can even move out of it just because you are tired of it and still have no worries.
- If you have a rented house than you have no baggage in life to carry with you forever which in property means you do not have to care for the house, spend on its maintenance and repairs, even when you move out and relocate.
- You have less cost to pay in getting a house right away. No extra costing to take care of like insurance, renovation etc.
- If you are to rent a house, you can even get it in the most posh areas of the city with just a bit of a higher rent and set a high standard of your living in affordable means.
- If you are retired or have a limited financial cycle, then renting a house is the most suitable option for you as it gives you the liberty of not being a burden on someone in your family but nevertheless, you can have a roof on your head and be able to pay for it too.
- If you are renting a house, then you can easily invest your capital or savings into different things that may be more profitable in terms of shorter cycle of payments and early interests or gains instead of burying your major investments in the property and not gaining any profits till you resell in the future.
Disadvantages of renting a house or property
- Renting as the old people still refer is the burning of your own money. You keep paying month by month and in the end you get nothing out of it.
- Sometimes the rent is equally higher as the mortgage payment of the house and thus one should think about paying the same way, slowly by slowly but for his own property.
- Sometimes you may have to move out and leave instantly, only because of your landlord wants you to leave, creating an insecure moment especially if you are living in a rented house with your family.
- You can’t change, amend or renovate as per your choice or requirement in a rented house which can be very restrictive sometimes.
- Often when you are looking out for a rented house in your favorite area you fail to acquire it in the amount you have saved up, for the lease of a rented house.
- You can’t control the increasing annual rates if you are living in a rented house.
- If two tenants are renting in a joint agreement than one must very carefully look into all the risks of the payments that might incur on you when one party moves out.