The choice between buying a house and renting one is among the biggest financial decisions that most adults make. While owning a house may be every individual’s dream, not many people can actually afford the initial asking price and subsequent upkeep costs. So, before deciding between the two, you must ask yourself whether you’ve got your finances in order, and whether you can actually afford a new house. The market is bad, with the world witnessing major economic problems. If you are looking for a house, I suggest you lease it instead of buying it. Here are a few reasons why.
Smaller Financial Investment
To rent a house, you only need to pay a security deposit along with the first month’s rent. Entering into a rental agreement costs significantly lesser than actually buying a house. Leasing a house does not require you to take a home loan from the bank, thus saving you from exorbitant interest rates and debt. You will also be able to avoid additional costs which accumulate if you own property, like property taxes, homeowner’s insurance, and interest on the loan.
Minimal Upkeep Costs
From broken appliances to pest infestations, the cost of home upkeep is reserved for owners, and not tenants. Unless you or your guests have caused damage to the property, your landlord will usually pay for repairs and replacements. All you are legally obligated to pay is the rent and the monthly utility bills.
Renting a home gives you more flexibility than owning a house. A lease agreement is generally drawn up for 11 or 12 months, after which the contract is terminated. If you want to end your agreement before it expires, all you need to do is give your landlord at least a month’s notice. You will also get back your security deposit (provided you haven’t inflicted damage upon the property). If you owned a house, however, and you were planning to relocate, you would have to put the house up for sale and wait for a reasonable bidder. This is a cumbersome process that you can avoid if you opted to rent.
No Loss of Equity or Property Value
Leasing a house means not having to worry about market trends and fluctuations in property value. As there is no direct investment involved in renting a house, there is no loss of equity.
All in all, renting a house allows for a more comfortable, easy-going lifestyle, where tenants enjoy the advantages of having a roof over their heads, without experiencing the hassles that accompany owning a house.
I am an avid writer, whose focus is more towards highlighting civic issues our society faces on a daily basis. I provide tips on property investment, write on real estate market price trends in India, and provide an insight on the latest residential projects. For more property related queries, you can visit http://www.commonfloor.com
By Abishek KumarShare on Facebook