Benefits and Challenges of Buying a Home
There are benefits and challenges to buying a home, just as there are to renting an apartment. The way owning a property gives one a sense of security is the same manner in which renting allows an individual more expendable money in the short term. Even so, the usual determinant after all series of thoughts is the amount of money one can afford to raise towards buying or renting.
Buying a Home
Owning a property gives a long-term benefit of equity, potential growth, and security in personal wealth (Pritchard, 2013). For instance, with a property, one can always secure bank loans and use the house as collateral. This allows one to expand his/her income base through investing in other areas. On the other hand, it is imperative to add to the account that owning a home comes with huge financial responsibilities such as regular house maintenance and bond repayments. Secondly, if an individual decides to buy a house, they stand high chances of making profits in the future when they resell since house values are likely to appreciate. However, it is also important to note that at times, homeowners might risk making losses through resale. This is habitually caused by economic factors such as high interest rates or recession, or even when a given neighborhood becomes less desirable (Pritchard, 2013).
As the owner of the property, one always has full control over the house; meaning that it is possible to alter the property, including renovating, landscaping, and decoring, to suit an individual's style and needs (Hamm, 2017). Even so, the advantage of redesigning the house in one's taste usually comes with the additional cost of maintenance, insurance, excluding the tax rates that property owners are responsible for paying. Finally, yet importantly, when a person buys a house, it becomes a legal property. This allows greater freedom in the use of the house without restrictions usually enforced by a property owner. Whereas the owner might be enjoying all these privileges, they also face the disadvantage of mobility (Hamm, 2017). A property-owner is normally less mobile in terms of their ability to move home as compared to a tenant who can relocate whenever he or she feels the need to move.
Renting a Home
It is usually perceived that there is more flexibility in renting a house than buying the whole property. Renting is normally ideal for people who are prone to relocating because of sudden changes such as a job (Pritchard, 2013). Besides, unlike property-owners, tenants do not need to have long-term commitments; hence, it is the best option if one does not intend to stay in one place for an extended period. Nevertheless, whereas tenants are free to move at any time they want, their freedom at the apartments is usually limited. At the premise, they are bound to adhere to rules and regulations set by the landlord, which can impact their freedom to renovate or use the property (Pritchard, 2013). In many, if not all properties, tenants are not allowed to make any changes without seeking permission from the owner.
As a tenant, there is always the option of living in a property, which one cannot afford to buy. Besides, after paying rent, one can still have extra cash to invest in other projects. On the contrary, regarding wealth creation, tenants will never have control over the annual fluctuations or rent, which are directly influenced by inflation (MakaaniQ, 2017). In addition, renting does not give any return on investment since the property will never belong to the tenant legally.
References
Adwpsite309X. (2016, March 13). The Pros and Cons of Buying, Leasing, and Renting Construction Equipment - SiteMax. Retrieved from https://sitemaxsystems.com/the-pros-and-cons-of-buying-leasing-and-renting-construction-equipment-2/
Hamm, T. (2017, December 13). The Advantages and Disadvantages of Owning a Rental Property - The Simple Dollar. Retrieved from https://www.thesimpledollar.com/the-advantages-and-disadvantages-of-owning-a-rental-property/
MakaaniQ. (2017, June 15). Advantages And Disadvantages Of Renting A House. Retrieved from https://www.makaan.com/iq/rent-property/advantages-and-disadvantages-of-renting-a-house
Pritchard, J. (2013, June 7). Pros and Cons of Rent to Own: Is it a Good Deal? Retrieved from https://www.thebalance.com/what-is-rent-to-own-315664
