The question of whether to rent or buy a house is one that has been asked millions of times. Real estate ownership or property leasing has its benefits and drawbacks. If you’re at a crossroads of whether to lease or buy a house, allow our property experts to give you a quick guide:
Renting a home
A common misconception about renting is that you’re wasting money. There are always costs incurred when needing a place to live. Whether it is through mortgage payments or through monthly rent. But to your advantage, renting a property can offer flexibility and a fixed amount of monthly expenses. At the same time, it will require you fewer upfront costs and paperwork. It will also let you have the mobility which suits those who don’t like settling down in one place for long periods of time.
One big advantage when it comes to renting is the lack of any stress when it comes to maintenance and repairs. This is usually covered by the insurance paid for the rental, as handled by your landowner. As a tenant, you also need not worry about the state of the home’s value when they rent.
However, when the lease comes up for renewal, there is always a chance that the landlord will increase his property’s value, and so does your rental fee. And should the landlord decide to sell the property, tenants will be at risk of relocation..
Buying a home
There are many advantages to owning a home, such as the sense of stability, belongingness in a community, and the sense of ownership. A common misconception on homeownership is that it can build wealth. It is entirely possible for a home to lose value as a home’s value relies on many factors from location, and surrounding housing projects.
One of the biggest apparent differences is the higher cost of homeownership. Even if the monthly mortgage is close to the value of the monthly rental payment. Monthly mortgage payments contribute to the biggest costs for any homeowner. This often includes the loan’s principal and interest, which may fluctuate if one has a variable interest rate. This payment could also be subject to change depending on the change of the property taxes or the homeowners insurance premiums. There are also these hidden expenses outside of the mortgage that homeowners need to consider, including repair and maintenance, water and sewage services, trash collection, homeowner’s insurance, and many more.
When you make a big purchase decision such as buying a home, you as a homeowner can reap its benefits in the longer term. Homes eventually build equity over time as you make monthly payments and lessen their mortgage balance. This rewards those who stick with the home for the long term because selling the home immediately won’t grant homeowners the benefits of equity.
Considerations
There are some questions you need to ask yourself before you decide whether to rent or buy a house:
- What is your monthly budget for housing? Can you afford the hidden costs of repair and maintenance?
- Are you ready for long-term investment? How long do you intend to stay in the home/area?
- What do you value more: flexibility or stability?
The verdict
The decision to buy or lease a home is a very personal choice based on a lot of factors. Seek help from an experienced real estate services agency that can offer guidance in making the right decision in every step of the way. Santos Knight Frank is a renowned real estate company that offers advisory, brokerage, appraisal, property management services, and many more. Visit the website to find out more https://santosknightfrank.com/.
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