Renting vs. Buying; Which Suits You Better?
If you are wondering whether you should buy a house or rent it, then you are not alone. Many people also get confused about buying a house or renting it. This is because it is not a very simple choice and can’t be made overnight, especially given the factors that you have to take into account.
There are various factors at play that a person should consider before making their decision. If the decision is made in isolation of all the factors involved, then you might regret it in the future. This is why it is important to take time to go over all the pros and cons of each option before finally making your decision to rent or buy a house. If you do decide to buy, you may want to consult the top realtors in Myrtle Beach.
Today, we will go over the pros and cons of both the options so that you can make an informed decision for yourself.
Table of Contents
Pros of Buying a House
- Buying a house gives you a chance to build equity and wealth over time, something that is not possible if you opt for renting. By deciding to buy a house, your monthly payments don’t count as an expense but as an investment. If the value of your house appreciates, you will be able to build wealth without any effort.
- If you decide to sell your house, then you can make a comfortable profit, depending on how much your property has appreciated. Real estate values appreciate by a considerable percentage, so owning a house is not a bad investment.
- You can choose to design and setup your house any way you like from the outside and the inside without any restrictions. This is because you own the house and it’s your legal property. However, when you rent a property, the real owner of the land is your landlord. Hence, you have to follow their rules. Therefore, when you buy a house, you have the freedom and liberty to decorate and renovate it as you like.
- You can save money in tax deductions when you are making the mortgage payments. This allows you to curtail the amount of taxes you pay initially.
- Families looking to settle down often prefer to own a house and establish their roots to give their children some stability.
Cons of Buying a House
- The biggest hurdle that individuals face when trying to buy a house is the huge initial cost that is required to make the purchase possible. This is the down payment required to start the procedure to buy the house via mortgage payments. This investment is multiplied manifold if you are looking to buy it yourself without any external financing options.
- There’s a risk that you’ll actually lose money instead of accumulating wealth if the property market goes down. This means that your house will be worth less than what you paid for it.
- All expenses related to the house will have to be paid in full by you, if your home insurance does not cover it. So if your roof is damaged by the rain or storm, this will have to be fixed by you.
- Buying and selling a house takes more time than renting it. This limits your flexibility when you want to shift to a different house.
- You’ll be stuck paying your mortgage payments for a long time if most of the house is financed externally. This means you will be in debt for a long time and will have to stay stable to be able to make the monthly mortgage payments. The interest payments are an additional cost that are also included in the mortgage payments. In short, buying a house is too expensive.
Pros of Renting a House
- Your expense is limited to the rent you pay every month. All maintenance cost and property taxes are paid by the landlord. This makes the amount you’ll spend on housing every month very predictable and you can plan your finances accordingly.
- You could possibly live in an area which you could not otherwise afford to live in if you had to buy a house there. This is a great option for a person who has a high disposable income, but doesn’t have a lot of wealth.
- Renting a home gives you much more flexibility than buying. If you want to shift neighborhoods or cities, then it would be very difficult to do this quickly if you own a house. This is a good option for people who have to frequently relocate because of their job.
Cons of Renting a House
- You will have to abide by the rules laid down by the landlord since they are the legal owners of the property. This will prevent you from making any major changes inside the house or room that the landlord does not allow.
- You don’t have a lot of bargaining power when the landlord wants to significantly increase the rent, unless the area is protected by government legislation.
- Renting doesn’t increase your wealth; instead, all your rental payments count as an expense in your account.
- You can’t avail any tax benefits when renting.
- You don’t have any stable place to stay as the landlord may kick you out of the property after the agreement is over.
The pros and cons discussed above should help you decide which option is more suitable for your requirements. If you think you need more flexibility and are not looking to settle down, then renting a house is more suitable. But if you do decide that you want to buy a house, then you should seek advice from expert real estate agents in Myrtle Beach.