The right to shelter is a fundamental human right. It is essential for our survival and wellbeing. Everyone should have access to safe and adequate housing.
Sadly, this can be hard to fulfill, even in a first-world country like the United States. But sometimes, owning a home can also be a burden, resulting in people renting one instead. You’re not necessarily homeless if you rent a home, and considering the prices of homes nowadays, it’s not a wrong decision.
Here are some advantages and disadvantages of renting a home.
Renting a Home
Renting a home is often seen as a more flexible option. You’re not tied down to one place, and you can move around fairly easily. It’s usually great for people who have only started their careers or those who want to travel a lot in the future.
The Pros
No maintenance costs
One of the biggest advantages of renting is that you don’t have to worry about repair or maintenance costs. If something in your home breaks, it’s the landlord’s responsibility to fix it.
No property tax
When you own a home, you’re responsible for paying property taxes. This can be a significant amount of money each year. Not paying property tax means you can put more into your investments.
Flexibility
Renting allows you to move around as your job or lifestyle changes. You’re not tied down to one place for 30 years like you are with a mortgage. This can give you more options for growing your career and even complement your lifestyle.
It’s Cheaper (depending on the price-to-rent ratio)
The cost of renting is often cheaper than owning a home, especially when you factor in all the other costs of ownership, such as repairs, maintenance, and property taxes. But this depends entirely on the price-to-rent ratio in your area. You can know your price-to-rent ratio by dividing the cost of renting by the cost of owning.
The Cons
Lack of ownership
One of the biggest disadvantages of renting is that you never actually own the property. You’re essentially just paying someone else’s mortgage while never building any equity in the property yourself.
You’re at the mercy of your landlord
Your landlord can raise the rent at any time or even decide to sell the property, which would mean you have to move. Of course, you also have to follow their rules and regulations.
Rent can increase over
Rent is often not fixed, which means it can increase over time. This can be a burden if you’re on a tight budget or if you’re not ready for the fast changes. When you can’t pay for rent, your landlord might kick you out
Buying a Home
Buying a home is great for people who have stabilized their careers and have no need to move. Moreover, it’s a great investment choice for those who have the money.
The Pros
Access to Mortgage
One of the main reasons why people get home is because they want to get a mortgage. A mortgage is one of the best credit products available and can help you buy a property sooner than if you were to pay cash. Certain online mortgage lenders such as pennstreetmortgage.com can even offer cheaper mortgage options for those who need them. This is essential for people who are in dire need of a home during this pandemic.
It’s an investment
Another great thing about buying a home is that it’s an investment. Over time, the value of your home will most likely appreciate, giving you a return on your investment. This is the power of compounding. This can be helpful if you ever need to sell or take out a loan against your property.
You have control and can make changes
When you buy a home, you’re in control. You can make changes to the property as you see fit and don’t have to worry about asking for permission from your landlord.
The Cons
Upfront costs are high (down payment, inspections, etc.)
The upfront costs of buying a home are often high. You’ll need to come up with a down payment, pay for inspections, and close costs. This can be difficult if you don’t have the money saved up.
It’s a long-term commitment
Buying a home is a long-term commitment. You’ll most likely be stuck in your home for at least 5-10 years, if not longer. This can be difficult if your job or lifestyle changes and you need to move.
Maintenance costs can be high
If something breaks in your home, you’re responsible for fixing it. This can be expensive, especially if you need to replace a major appliance or make structural repairs.
Now that we’ve looked at the pros and cons of renting vs. buying let’s look at which one is better this year.
Renting might be the better choice this year if you’re not ready to commit to a long-term mortgage, don’t have the money for a down payment, or you think you might need to move soon.
This year, buying a home might be the better choice if you have the money saved up for a down payment, are in a stable job, and don’t think you’ll need to move anytime soon.
It’s essential to weigh your options and figure out what’s best for you and your situation. If you’re unsure, it’s always better to halt your plans and research some more.
