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Buyer vs Renting

Is it better to purchase a property rather than to rent one? Weigh the advantages and disadvantages of each and see if you are able and willing enough to make a commitment to buy.

Why purchase a property?
Everyone has a dream of having their own house someday to build, design and manage in the future for their family. It gives them a sense of accomplishment as well as stability. Unfortunately, increasing prices of real estate has made it harder for new buyers to afford one. And some do not have the perseverance and the commitment to make a home of their own and are content with just renting out a property for temporary purposes. They become unwilling to sacrifice their time and freedom. This is why it is not only the finances that are considered when buying but even the disposition and priority of the buyer himself.


Security : Having a home to call your own eases your mind in terms of safety and convenience for you and your family. You can do anything you want to your house without worrying about lease conditions and the ever increasing prices of rent.

Investment : Real estate property prices are constantly appreciating in value, making your equity grow as well, which can be utilized to secure further loans for your retirement.

Savings strategy : Think of the payments that you make every month for your home loan as stepping stones towards financial freedom and owning your home completely. It is like forcing yourself to save a portion of your salary for you dream home.

Lifestyle : To be able to choose and implement the design and décor that you like for your house to fit the lifestyle that you dream of is a powerful incentive in making people home owners. It is considered a waste of time and a huge expense besides to decorate your rented house in the way you like it to only leave it when your lease ends. Sometimes you are not even allowed to change or make any alterations in the design of the house. Having your own home changes all this, giving you a free reign to improve your house the way you like it, and even increasing its market value.

Tax incentives : The interest added on the monthly payments of your mortgage is tax deductible if the property you bought is for the purpose of investment. If you rent out your property to tenants, then you can take advantage of this benefit.

Status :
Being the owner of a home, especially a nice one, gives you the status of being financially capable. This status has a lot of benefits, one of them is having a high credit rating which can be of use if ever you need to borrow cash from banks and other financial institutions.


Struggle to save deposit :
To be able to come up with the required deposit for the home that you like can be taxing for yourself as you scrimp and save every cent that you have, changing your present lifestyle drastically. Months or even years of saving can affect your outlook in life as well as sacrificing a lot of expensive habits and trimming down on credit card charges for out-of-town holidays, fine dining meals, and even taking the public transport to save on gas.

High Costs : It will definitely cost more to buy a house rather than renting since aside from the monthly mortgage, you have maintenance charges, repairs, insurance, taxes, council rates, and association dues to worry about. You will see that these expenses take a huge chunk out of your monthly income, making it really burdensome on your financial situation.

Price Depreciation : Investments are always risky, especially in terms of prices because you have no control over it. Something may happen that can let the market value of properties on a certain area fall, thus making you lose money if you plan to sell your property at this time.

Interest rates : Interest rates, unless specified always increases annually. If it is already a struggle for you to make your monthly mortgage payments, then you might find yourself with a huge problem of paying for it during the next year when interest rates increase. Although people who rent a house also get their rents increased yearly, at least there is the possibility of negotiating this with your landlord or just relocating to another place.

Location bound : There are people who have nomadic tendencies, that is, they do not stay long in one place and are constantly on the move. For some, it is part of their lifestyle while for others, it is for their career. Some hate the feeling of permanence because it is synonymous to losing their freedom. Although relocating is more likely to incur a lot of expenses, it does not matter since it is basically equivalent to the transaction costs that you incur in buying and selling property for every few years.


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