Should You Rent or Buy Your Own House?

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One of the biggest decisions that every family makes, at some point in their lives, is whether to rent or buy their own house. The answer to this depends on many factors. You have to consider the location, finances, lifestyle, and plans for the future.

In addition, the impact of the Covid-19 pandemic to the housing market is another factor that needs looking into. These days, other factors such as online schooling, working from home, and quick access to hospitals and medical facilities are taken into consideration before making a decision.

My family and I are currently renting, as it is the most practical setup for the time being. We are however, planning to buy our own home in the near future. In preparation, I have done a bit of research on the pros and cons of renting vs buying our own home. If you are on the fence regarding which direction to take, take a look at some of the advantages and disadvantages of both renting and owning a home.

Pros and Cons of Renting

Less cash out prior to moving in- Most landlords will only ask for at least 2 months of advance rent plus a security deposit before you can move in.

Less commitment – Apartment or house rental contracts usually end after 1-2 years and you can either renew or end the contract. This gives you more flexibility to renew or end your contract should you need to move out. A plus factor if your future plans involve a lot of traveling or moving to another city or state.

Limited Personalization- If you are living in a rental, renovations and home improvements are usually limited. This means, you can only use temporary fixtures should you wish to personalize your living space. Consider doing some research before you decide to rent an apartment or a home.

Increase in Rental- It is common knowledge that landlords may increase the rent after a few years or so, depending on the contract, which means, you have to be prepared for this additional expense.

Pros and Cons of Buying a House

Costs More – Since you are buying a property, you can expect a higher upfront cost like closing costs and down payment. Aside from these, you also need to think about the increasing property taxes. Moreover, if you are getting a mortgage, you will be responsible for sending in your regular payments so it is critical that you properly estimate monthly payments to be better prepared. Write down loan repayment plans as well as yearly amortizations so you can visualize the feasibility of your plan.

Can be considered an investment – When buying a property, you can work on the market value of your house and sell it in the future. This can help increase your financial gain.

Home Improvement and Renovations – As the homeowner, you have free rein over the property. You can renovate or make changes to the entire house without a problem.

Housing Market Value- as a homeowner, you need to know the fact that the market value of your property can rise or fall depending on the economic health of your city or location.

To be a homeowner means you need to be committed financially. It needs more preparation, planning and budgeting compared to renting.

Both renting and buying a home require sound financial commitment. It is critical that you plan in advance before closing the deal. Just remember that the best choice is the one that aligns with your life goals and financial capacity.