Is it better to rent or buy the house you want to live in? This question comes every now and again to almost every individual’s mind. To be able to find the most fitting answer one needs to first understand the benefits of each of the options.
According to Investopedia, renting offers flexibility, predictable monthly expenses, and someone to handle repairs. This is what most young people go for because they prefer flexibility in their lives than being stuck in one situation. The experts note that however homeownership brings intangible benefits. These include a sense of stability, belonging to a community, and pride of ownership, along with the tangible ones of tax deductions and equity. Interestingly contrary to popular belief, renting doesn’t mean you’re “throwing away money” every month, and owning doesn’t always build wealth “in the long run.” Hence the need to carefully analyse both scenarios before setting for what best suits you.
REMAX Real Estate Agent’s Ellroy Johnson says financial considerations also come into play when advising a person who is trying to decide on which to go for.
“If a person has E10 000, for example, to spend on monthly rent, we can sit down with them and propose that they look into owning property instead as that money or even much less can go towards a bond. But if a person is renting for much less perhaps renting is their best option for that time,” he said.
But this is just one part of the scenario. Which option is best for you is not just about the money you have. It is also about comfort and your vision for your life. Ignore people who tell you that owning always makes more sense in the long run or that renting is throwing away money.
Research on homeownership shows that still, despite the risk, added expense, and extra chores associated with owning a home, many people choose it over renting. This is because it provides a more permanent place to raise children and also for yourself. It is also frequently the only way to have, or create, the sort of residence people want. It is also an asset that you can always list and is among your net worth.
Interestingly though renting offers a flexibility that owning cannot. Do you like having your evenings and weekends to use as you please? Do you work long hours or travel frequently? If so, then the time commitment that comes with homeownership might be more than you want to take on. There are always projects around a house that you will need or want to take care of, from finding a plumber to replace a rusted-out pipe to repainting the bedroom to mowing the lawn.
So before making that choice of whether to rent or buy, you need to consider your lifestyle and all the aspects discussed above.
Ultimately, the decision to rent or to own is not just financial, it is also emotional and personal.