Should you rent or buy a home? Before you answer, let’s concede one universal fact that applies to everything: It is circumstantial. Renting and owning are not absolutes that apply to everyone, equally. Your final decision will depend on what you need at the present time, and what your goals are for the future, Consider the following variables in order to determine which option is really the most beneficial to you.
1. SPENDING OR INVESTING?
OWNING: How solid are your finances? If your financial resources are substantial enough to be able to invest in a down payment for a mortgage, or to secure a mortgage low enough to afford every month, you may want to consider ownership.
PRO: When you own a property, you are ultimately paying your own mortgage off, giving yourself all the property tax credits that come with ownership. Moreover, you will be building credit, and working on paying off what would eventually become “your” home.
CON: With owning also comes “maintaining”. Do not invest in a property that you cannot make better, or keep in optimal living conditions. For this reason, ownership also means investing in the maintenance of all the features of the property. From plumbing, to up keeping the roof, to updating its grounds, and keeping all clean and orderly.
PRO: With renting, your financial expenditures would cover the update ad maintenance of the property where you will stay. You are not directly responsible for grounds keeping, or for updating the infrastructure of the house. The owner will be directly responsible for providing these for you.
CON: You will be depending on the reliability and integrity of the owner of the property, and on the bylaws of the lease or rental agreement for the time that you reside in the property. Your financial expenses will go toward paying for the third or second party to fulfill their part of the contract. While there are many laws and programs that protect renters, there is never a guarantee as to who will be the person on the other end of the contract.
Ownership has its benefits, and its drawbacks. You will be ultimately INVESTING in your property with every expense that you incur, as the residence is your own. You are in complete control of it, until the moment when you can no longer pay. If this happens, you will lose your property, and other consequences will follow, including damaging your credit.
Renting has the benefit of not having to commit to one property; however, you still have to commit to the rental agreement and requirements upon your stay. You will ultimately be SPENDING your money on privileges and assurances to be provided by a third party. You are not completely in control, but you can control whether you want to continue to live in one place, or not, as long as it is allowed in the contract. Keep in mind that a breach in a rental agreement can carry legal consequences as well.
2. STAYING OR LEAVING?
A second category to consider is your own plan for life. Does your life plan include staying in one place, or are you flexible? This is perhaps the deal maker or breaker when it comes to deciding to own a home. This is also because, in this day and age, jobs are likely to require mobility. Or will not offer long-lasting contracts for someone to invest in a long-term property mortgage.
OWNING: If you own a property, you are ultimately responsible for it. If you have to leave your property, you can always decide whether you will continue to pay your mortgage even though you are not living in it, or whether you will rent it to someone else.
PRO: Your house, your business. You do as you wish.
CON: If you need to rent, finding renters that will abide by all YOUR rules and regulations is a risk that you will have to take. If you are not around, you cannot control what goes on in your property. Also, in order to sell or rent your home, you must prepare it for a potential renter or buyer. Expect to spend money fixing your place first.
RENTING: As long as your have your renter’s contract handy, and you make clear from the start how long you will need residence for, all you would need to do is clear your premises exactly as you are required to.
PRO: You are not committed to one place to live. You just need to know how long you are supposed to sign your lease or contract for, and make the best of your time there. Make sure the you read all the fine print in the rental agreement so that there are no misunderstandings as to what you are entitled to, or not.
CON: As with every living arrangement, you cannot control who moves next to you, what goes on in the grounds of your building, or who are the visitors that other neighbors bring into the premises.
One constant issue with renters, especially those in small apartment units, is the constant variable of who gets to move next door to you. Will it be someone who likes to blast music and will not follow regulations? Is it someone that you do not trust? Always study the place, speak with people who have lived there. Even go to the locale’s social media page and see what people are saying about that.
Ownership- When it comes to moving out of your residence, there is very little you can control with ownership, except making the final decision on whether you rather rent, or keep paying for your home even if you are not there. Simply think what risks you are willing to take if you do decide to let someone else rent your place. Or whether you are financially stable enough to keep maintaining an empty house.
Renting– You may have the freedom to move from place to place, but you do need to do it by following the rules correctly. You also need to study where you want to move prior to doing it, so that you do not end up breaching a contract if something does not go as you expected.
TAKE AWAY: Owning is a big responsibility that could lead to financial and credit woes if not followed properly. Renting is not a free pass; it comes with contracts and rules. Therefore, both decisions, any of them, have to be made seriously. They both require taking risks, and engaging in prior research before committing.