Should You Rent Or Buy A Home?
There are a lot of important factors to consider before deciding whether to rent a home or to buy one
Getting your own place to live in is one of the biggest and most important decisions you’ll ever make, which means that it is something to be given a lot of thought.
Before anything else, it is essential for you to have an idea of what your needs are, which will allow you to also know what kind of housing is best suited for you. This includes whether it will be more advantageous for you to purchase a property or to rent one.
When to buy a home
If you see yourself residing at an address for the long-term, then you might consider becoming its homeowner. Besides having the pride of owning your own place, you also have complete control over decorating or renovating according to your tastes and lifestyle. Monetary benefits are also present when you choose to buy because with every mortgage payment, you are getting closer to owning property. This is the big difference from renting, wherein your monthly payment creates value not for you, but for the owner.
A possible hurdle is that investing in your own property means there is a risk that its value can decrease or remain static depending on the condition of the real estate industry. Also, if you own your home, you cannot simply pack up and move whenever you want to, you would have to go through the process of finding a buyer and selling the house.
READ: 5 Signs You're Ready To Buy A Home
When to rent
On the other hand, generally, it is more viable to rent if you need the place for the short-term—a mere few months to one to two years. If you are single or starting out on your own, for instance, renting can be advantageous because the responsibility for major repairs, maintenance, improvements, and other aspects of home ownership that can be costly and time-consuming is shouldered by the owner.
But if the location of your rented home is in a developed or developing area, there is a good opportunity for your house to increase in value or appreciate as time goes by, increasing your owner’s equity. Owned properties can be used as collateral for bank loans as well. But before taking the plunge, ask yourself if you can afford the downpayment and installments to purchase a house and if you are willing and capable to shoulder the responsibilities and costs of owning a house.
READ: 6 Frequently Asked Questions About Renting
Making a decision
To rent or to buy—both choices certainly have their advantages and disadvantages, which can factor into your decision-making. With many housing developments in the metropolis and many others rising up within the city and its outskirts, there is a wide range of options to choose from that would fit your family’s needs, lifestyle, and financial capability. Be sure to make your decision wisely, and in consideration of all the different factors needed to be thought about.
This article originally appeared as “Rent vs. Buy” in the June 2006 issue of Real Living Magazine.
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