If you are quick to infer that owning a house is always preferable to renting one, continue reading to learn why this is not always the case.
Renting is often frowned upon, and conventional logic screams that it is always better to own your home than rent. After all, monthly rent to a landlord is a waste of money. At the very least, this is what proponents of homeownership assert. But paying for rent is no more like tossing money in the garbage than is paying your monthly food bill. In both instances, you spend money you’ll never see again, but you have received a necessary good or service in both cases.
Although the decision to buy or rent is ultimately up to an individual’s preference, For these reasons, renting is a better alternative than purchasing a home.
Unfavourable Interest Rates do Not bind you.
Buying a house means entering into a huge debt obligation. If you cannot secure a favourable interest rate because of your current financial situation or because interest rate markets have skyrocketed, it may be better to put off buying until this changes. The cost of ownership may arise when the business ceases to exist.
Viewing a House as an Investment May Be Flawed Logic
Many costs associated with homeownership make it challenging to be classed as an investment or savings plan. For example, homeowners are typically comfortable paying mortgage instalments every month because this contributes to homeowners’ equity. This store of value, although accurate, may not be the best way to save because to access this money, you would need to take an additional loan, albeit at a lower rate of interest. If your objective is to boost your savings, you could be better suited placing your money straight into a savings plan.
Renters Don’t Have to Worry About Maintenance.
While renting, leaky faucets, deteriorating roof tiles, and peeling paint are non-issues. On the other hand, Homeowners must have a fund ready to dip into to take care of these problems as they arise. Home maintenance can be expensive, so it is essential not to buy more houses than you need because this is just an unnecessary cost to carry.
Home Prices Fluctuate, So Homeowners Are Exposed to Risk
Although the general trend is for home prices to rise over time, the housing market fluctuates like every other commodity. As a result, home prices move up and down, and if you are forced to sell during a period of market weakness, you risk incurring a loss on your investment.
Retain the Freedom to Move at Will
Finally, renters get to live a free lifestyle. It is not for everyone, but if your job requires you to be flexible about where you live or if you like to know you can move at the drop of a hat, then renting may be more your style.
