Have you ever dreamt about having your own house? The most important goals in the life of an average person include getting a job, getting married, buying a home, and owning a car. It’s a nice feeling to own a house and start your family in it. Buying a house is a part of the big American dream, as it translates to having stability in life.
Every culture has a different perspective on the ideal house. As far as Americans are concerned, we want a spacious house where we can host gatherings and make home upgrades for convenience. It’s part of the culture not to compromise. You may start with a small apartment, but it’s natural to move to a bigger property as your family grows. But is it a wise decision to buy a house early in your career?
What about renting? Some consider renting a liability. Indeed, it has some drawbacks. Since the property is not your own, you can’t do much with it. On the brighter side, renting allows you to live without any responsibility. It’s flexible as you can move out anytime if you change cities. Also, you don’t have to pay for maintenance.
As they say, there are two sides to every coin. There are bound to be advantages and disadvantages to both. It’s like owning a car or taking car services. Once you buy a vehicle within your budget, you’re stuck with it. On the contrary, you spend money only when you travel or every once in a while with car services like premier limousine rentals. Apart from the social pleasure that comes with buying a house and the restrictions of renting, let’s analyze the pros and cons of both concepts from a financial point of view.
The bright side to renting is the flexibility that it brings. For a fixed price every month, you can ditch the maintenance bill and move whenever you want. But then again, you may also have to move unwillingly if the landlord decides in favor of it. Since it’s private property, one can increase the rent anytime, and you don’t have much say in it. In this case, too, someone else’s decision has the power to alter your entire budget or force you to move.
The decision to rent a house depends more on what you do than how much you earn. If your work requires you to travel and move a lot, then no doubt renting a place is ideal for you. You’ll save up on expensive commitments that come with homeownership—responsibilities like repairing a leaking roof, plumbing, or broken floor. Renting an apartment relieves you from these responsibilities.
The main upper hand that ownership has over renting is that a property can build equity over time. You can buy a house for $200,000 and sell it for $300,000 or more. But these numbers are not predictable. In some cases, due to the inflation or reduction in population, the value of a property can seriously decrease.
Owning a house is much more about convenience than it is about finance. Renting allows you to have a fixed estimate of how much you spend per month. The only time you spend more is when your lease is about to expire. But ownership comes with surprise expenditure. Your plaster can fall, or doors can break, which you must fix.
What drives so many people to buy houses is the idea of owning a property that they can do anything with. Do you want a pool? Build one. Do you want a dog? Get one. You own the place. It feels terrific to provide separate rooms to your kids and your own for privacy. House is the nest for memories that you can build over a lifetime.
You might think that owning a house is better in the long term. Most people think renting is just throwing money each month. But it’s not like that. The total cost of home-owning is much more than renting. The biggest advantage of owning a house, which is selling it for a profit, is uncertain, though. You can’t sell when the market is down, so you have to wait for the right moment.
Also, the cost of moving when you own a house is significantly greater than when you’re a paying guest. While moving, you might think that renovating the house can add to its value, but that’s rarely the case. Even prepping the house for selling will cost you money if you’ve saved up on proper maintenance over the years. So either way, it means expenditure.
After close consideration, you can conclude that your decision to own or rent is a matter of lifestyle. Financially, renting is better as you can avoid maintenance expenses, but the sense of accomplishment homeownership brings remains unmatched. Still, it all boils down to your lifestyle preferences. If you travel a lot, then renting is better. But if you want to start a family and have a stable life, it’s better to buy a property.