Renting vs buying: Which one is more advisable?

By Soko Directory Team / February 15, 2020 | 12:51 am




We all have plans in life. Well, not exactly all of us but the majority of us. One of the most common plans people have is acquiring a house. Of course, a home is an essential commodity that none of us should have. It doesn’t matter whether it’s your own or rented.

However, here comes a question. What’s the best option for renting a house and buying one? You already know that you can’t purchase a house without money. In the meantime, you can rent as you wait to save enough for a house. Economists may suggest otherwise though.

On the other hand, you could be having enough money to buy a house but you just prefer renting. Now, what’s the best option? This article has amazing tips to help you choose between renting and buying. Check this out.

Factors to consider when choosing between renting and buying a house

If you are to choose between the two, there are some things you must put in mind. You don’t just wake up one morning and make up your mind to either buy or rent. These are some of the factors.

  1. Cost

Your financial ability should help you decide. Can you afford to buy a house? If you can’t, can you afford to pay for deposit and rent? According to your earnings, can you put up with paying rent each month? What’s the amount you’re supposed to pay? If you choose to buy, can you afford the mortgage? How long will it take for the house to be fully yours?

What you choose should be able to fit in your earnings and budget. A cheaper house can encourage buying while a lower rent amount can encourage renting. It might require some renovation but you can always find ways to save money while doing it.

  1. Your plans

What are your long-term plans concerning accommodation? Are you the type that can just be comfortable paying rent all your life? If yes, then there’s no harm in renting. If you want a house to be one of the assets under your name, then you should buy one.

Many people buy houses to provide their families with a place to live comfortably. What if you neither have a spouse or kids? Is it really worth owning a huge mansion with no one to occupy it?

  1. Advantages and disadvantages

Each choice has its pros and cons. It’s upon you to weigh them and decide on the most appropriate option. Renting a house comes with several benefits. First, it gives you the freedom to be mobile. In case you don’t like conditions in a certain area, you can simply move to another place. Also, you won’t be responsible for repairs and maintenance in case of breakdowns. This option also saves you from property tax.

Contrarily, renting also has disadvantages. First, rent fluctuations can affect you. In case the landlord increases the amount, you may suffer financially. Second, you won’t enjoy any tax benefits. Also, you may have to move when the situation is so inconvenient for you. Let’s say your landlord sells the property, you will have to move whether you like it or not. You also have to comply with the landlord’s rules and guidelines that they set.

What about buying? Does it have any advantages? Of course yes. First, you won’t have to report to any landlord. No monthly payments will be made once you pay in full. You’ll also have all the freedom to customize the house to suit your preference.

On the other hand, buying a house requires a lot of money. In case home values drop, you can easily lose your money. House prices can also go up, making it difficult to even finish paying your mortgage. Repairs will all be under your responsibility. What about moving? You’ll be tied in one place and moving can only be possible if you decide to resell the house.

  1. Convenience

What do you need at the moment? Is it just a place to put up for your new job or a permanent home for your family? Sometimes, you can just rent for a short time to perform certain duties. For instance, if you get a job far away, you’ll definitely need to rent a house. Once the contract expires, you’ll then go back.

You can choose between renting and buying according to your convenience.

Conclusion

Now, should rent or buy a house? This decision entirely depends on you. Gauge your plans, preferences, costs, and other factors. At the end of the day, you should be able to come up with a wise decision. Otherwise, both options are suitable; depending on who’s making the decision. For short term purposes, you can choose to rent and buy a house later. Make sure you evaluate all factors and the options available before you settle on renting or buying.

Written by Edita Rhodes





About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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