Read more about Real Estate
Here’s the truth: there are several good reasons anyone might settle for one over the other. And it’s not necessarily the case that people who can afford to live in a house they own would do so. In this article, we’ll explore the pros and cons of owning or renting a home, and take a brief look at the factors you should consider before making a decision.
Owning a Home: The Pros
- Take pride in your ownership of your own home
- Avoid paying rent (which tends to increase over time)
- Profit from buying or building a home and selling it later
- Enjoy a sense of security
- Have control over your abode; decide how it’s maintained, and make changes to it
Owning a Home: The Cons
- Pay property taxes
- Insurance costs
- Repair and maintenance costs
- Some costs are not predictable, i.e. they may arise at any time
- Unless you renovate it, your house could become outdated and even lose value in real terms in the long run
Renting a Home: The Pros
- Costs are periodic and predictable
- You don’t have to pay for a raft of things—insurance, maintenance, renovation, etc.
- Greater flexibility concerning where to live
- Incur lower utility costs, as they are usually shared between tenants
- Easier to downsize if you have to live on a smaller budget
Renting a Home: The Cons
- Less control over your space than you would have if you owned it
- Rent tends to increase over time
- Lack of stability
- Your landlord can evict you at any time
- You are bound by the rules of your lease agreement
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Factors to Consider
When deciding on whether to own or rent a home, there are a few things you have to consider:Financial Status
In most cases, it’s easier to build or buy your own house if you have the funds for this. The costs involved almost always exceed what you’ll need to rent a living space, at least in the short term. If you’re taking out a mortgage to get your own home, be sure that it’s something you’re able to pay as designated by the lender.Personal Preparedness
Owning a home comes with great responsibility. You will have to take care of maintenance and repairs and pay a range of bills over time. There are also risks involved, such as falling property value in the case that the real estate market depreciates, or the costs that come with suffering a natural disaster or major destructive incident.Nature of the Market
The real estate market has its ups and downs. It’s probably a good idea to buy or build your house if property prices have historically trended upwards in real terms (when discounted for inflation). However, if you observe that prices haven’t changed much in real terms over time, it may be better to rent a house.Location
If you can afford to buy or build a home in a decent location, you may want to do so. But if you can’t, it might be wiser to rent and wait until you’re able to afford a home of your own in your desired location. Some places are great spots to have a property in; others, not so much. Consider things like accessibility, infrastructure and amenities, historical value appreciation, and prospects, before making a decision.Register to attend the CN Business Mixer
Final Words
Should you own or rent a home? The answer to this question depends on the pros and cons of either option—what set of benefits and drawbacks you’re willing to live with. We’ve presented you with them, along with a few factors you should consider in the lead-up to owning or renting a home. You should ponder these things before deciding what to go for.Featured Image Source: Investopedia
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