Renting a home against buying a home advantages and disadvantages will be extensively explored in this article.
It will guide you in making a decision either to buy or rent a home.
Choosing to buy or rent a home is a major decision that affects your financial state.
The debate about buying or renting a home is an age-long argument that seems never to end.
However, people often prefer buying a home, rather than renting.
They see it as; a good investment, a mark of adulthood and belonging to a community.
This does not suggest that buying a home is better than renting a home.
Consider the advantages and disadvantages of each to figure out whether owning or renting is ideal for you.
WANT TO BUY A HOME?
Advantages of buying a home
1] A sense of stability
When you own your home there is this feeling of being secure that you are in your home for the long haul. You never have to deal with the troubles of the Landlord because you are the landlord.
2] A sense of belonging to a community
Hence you are going to stay in the community for a very long time, possibly until your demise. You want to be part of the growth of the community.
3] It’s an investment
Owning a home is an investment just as buying shares on the stock market. It also enables you to build equity as you pay down your mortgage, increasing your financial options.
4] There is freedom
Boundaries are not set for you on what to do in your home. You can decide to change the roof of your house to a design that suits you.
You can have a fish pond, you can change the wall decorations, it is your home and your choice.
DISADVANTAGES OF BUYING A HOME
1] It cost money to maintain your home
It is good you have owned a home, there are going to be government taxes on your property. Here in Lagos, Nigeria there is Land Use Charge you are expected to pay on your home.
Also if there is a defect on your wastewater drainage unattended to. The Local Government will place a penalty on you.
2] RAISING MONEY
Oftentimes you will need a huge deposit before securing a mortgage.
Having a mortgage means that you will need to pay interest rates on your loan.
4] EARTHQUAKE INSURANCE, in some areas.
DO YOU PREFER TO RENT A HOME?
If you rent a home your landlord is expected to care for repairs and maintenance. Renting comes with this flexibility on how you spend your money.
You are not tied to one financial place of commitment for years. When you rent, you know exactly how much you will spend on housing monthly.
Advantages of renting a home
1] There is freedom
There is no mortgage to tie you down. This gives you freedom in your choices about where you want to live and how long you want to be there.
2] Good knowledge of expenses
When you rent, you know what will be spent on housing.
3] Flexibility with money
If you buy a home, the deposit saved is locked away. It is not liquid but that deposit money can be used to buy stocks and spread across a diversified portfolio.
4] You have time to save money
Renting can be cheaper than mortgage payments would be on the same property. This can provide an opportunity for you to save up money for a deposit, then purchase a home when the timing is right.
Disadvantages of renting a home
1] Unpredictable Rent
When you rent a home, you face unpredictable rent increases each time your lease is up for renewal.
2] Lack of security
Your Landlord can decide not to renew your lease or end the lease in certain situations if he wants to sell the property. This means you will have to move on short notice.
3] Actions of the Landlord
Certain actions of your landlord affect your well being. He did not fix your broken shower. An unexpected visit to your home.
4] No pets policy
This is important for those that own pets. There are Landlords that have a No pets policy on their property. So if you have a pet, you will have to do away with it before securing the home for rent.