Hi,
(pixabay image)
I have to deal with a difficult question a few days ago that what is better-to own a house or rent a house? I seeked advice on this matter. I got responses which I am sharing with you.
Whether to rent a home or build one, choice depends on multiple factors like personal choice, lifestyle and the most important, personal finance. If someone has a job which requires frequent shifting, then it is better for them to rent a house or apartment because it is easy to vacate a rented house then to sell a house. One cannot built or buy houses frequently and sell the same easily, if one is not having a property business.
In renting (and owning a home), you have lots of benefits (and shortcomings) which I am describing below:
Renting a home is often seen as a pragmatic choice, especially in urban centers or during transitional phases of life.
Benefits: It gives you flexibility and mobility. It allows you to relocate easily for career, family, or lifestyle changes. It also requires minimal initial investment, usually just a security deposit and first month’s rent while owning a house requires too much initial capital. Maintenance is the responsibility of the owner. So, one can save money easily which one will have to spend on maintenance, taxes etc. of the house. The capital invested on buying or building home is tied up while the renters can invest in stocks, businesses, or other ventures with potentially higher returns. It is not wise to pay half of your monthly income as EMI of loan.
Cons: Renting doesn’t give you ownership. You spend money every month to pay your rent but you don’t get any return even if you pay rent for your lifetime. You have limited control over the rented house as you have to take permission for renovation, personalization and having pets etc. Property owner may ask you to vacate the house whenever he likes and risk of rent hike is always there.
Owning of house gives you a great satisfaction which comes from owning a property. It is viewed as a milestone of financial maturity and personal achievement in society. It offers permanence and the chance to create a space tailored to one’s needs. Homeowners enjoy long-term residence without the fear of eviction or rent hikes. They can have personalized design, layout, and features that reflect individual taste and lifestyle and also may receive income from renting their house, save taxes on mortgage interests etc.
Cons: It requires too much capital to own a house. It requires selecting a proper locality and land plot, buying a land for building house, select the contractor, pays taxes etc. This is the initial burden and headaches, then comes renovation cost, repairing and maintenance cost etc. You put all of your liquid assets on owning a house and also have to pay loan EMIs. So, you have limited chances to invest money on other things. Buildings price also reduces with time as its value depreciates every year.
As you can see, there are pros and cons in both the cases. So, one should have a clear strategic financial goals and need based analysis of one’s requirements. If you have enough capital and you don’t have shifting business then it is better to own a house. If you have enough salary, permanent job, and there are chances of regular growth, owning a house on which you need to invest only less than 50% of your net monthly salary is a better option. If you don’t have enough financial resources, then it is better for you to rent a house.
With love from Erica.
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I'm glad to own my home mortgage free after 22 years.
And at least a few years before buying to accumulate a down payment.
It required discipline, consistency, sacrifice and at some measure ...luck.
My home also had a secondary rental unit which generated an income.
The location was carefully chosen central to a travel hub and access to shopping. So a lot had to go right. I don't think I could repeat this feat since the cost of living has since outpaced my income.
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LOHtokens.@hive-124452, you successfully shared 0.1000 LOH with @erica005 and you earned 0.1000 LOH as tips. (3/50 calls)
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