Everyone wants to buy a house, but Is it a good choice to buy a house or to live in a rented house? which is better rent vs buy?
and most people It is a dream to buy a house, either it is small or big, most people have a belief in their mind that their success is buying a house. Therefore I will tell you about the truth of buying vs renting a house and let you make the decision which to choose?
POINTS TO LEARN
5. THINGS TO KEEP IN MIND WHILE BUYING A HOUSE
1. PROS OF RENTING IN RENT VS BUY
(a) Flexibility:
The first and foremost important benefit of renting is, It gives you flexibility so you can go anywhere,
This is for those people who want to live their life freely. That doesn’t mean living in a rented house, bound you to live at a place forever and If you are a person who wants to live their life freely
Then this is the biggest advantage of rent vs buy for you. It does not mean that I am saying that buying a house makes you bound but live in a rented house makes you more flexible
(b) Affordability:
The next important advantage is affordability. I mean everyone is not able to buy the home at once due to lack of money. You can even live in that house which you wanted to live in but if you do not have enough money to buy it.
Then here is the advantage to those people who want to live in a house with affordability,
(c) Low Maintenance/No Maintenance:
Now This depends on house to house policies With affordability, there is another benefit is Low Maintenance means you are not responsible for everything in the house
If there is any damage or repair related to wear and tear It is Landlord’s responsibility to fix it, but if any damage caused by you like as breaking the glass of window It is not LandLord responsibility, It is your responsibility to fix that damage
But make sure that you read the contract carefully sometimes It does not condition as I told you
(d) Only Security:
There is another benefit to tenant is you don’t need to pay any down payment,
In renting you only have to pay is security payment why this is a benefit because the amount of down payment is so high as compared to security,
For Example, If the price of the house is $100,000 and down payment can be $20,000 where it comes to security, You might pay 2 months of security which can $2000 means that’s 10 times cheaper
(e) No Insurance Payment:
In case If the house is insured for some reasons you don’t have to pay any insurance premium amount
2. CONS OF RENTING IN RENT VS BUY
(a) You do not have full authority in the house:
You do not have any right to make any changes in that house in which you are living. The only way to make any changes in that property is to make sure you get permission from your landlord for any changes
(b) You are losing money:
The other disadvantages of living in a rent house is you are not making any money, you are losing money
(c) Rent is not the same as mortgage:
The next and big disadvantages of living in a rented house is your housing rent is not same as the mortgage payment,
If you mortgage your house you pay the same amount of money every month but if you pay rent every month the rent will be increased year by year It is also a noticeable thing to keep in mind
(d) Tenant is not the owner of the house:
Another big disadvantage of renting is that you are living in that house. It does not mean that you are the owner of that house. You are paying money, not for your asset but you are paying for someone else asset, It means literally you are draining your money
You have to keep these things while comparing to rent vs buy
Be aware of these 5 ways you might lose your money
3. PROS OF BUYING IN RENT VS BUY
(a) Buying is cheaper than renting:
The first and foremost benefit of owning a property is it will be cheaper than renting in the long term
So, how it works If you calculate the rates of owning a property and buying a property in the short term you might think that renting is better than buying, but in long term, you would realize that buying that property is a good option than renting because in renting you do nothing but you are losing your money
(b) You are the king of your own property:
The second most important benefit of owning a property is You are free to make any change in that property
In owning a property you are the king of that house you are not a slave of anyone. Unlike in living in a renting house first you have to ask for making changes in the house
if the changes are expensive that will make your house more beautiful that benefit also goes to the owner of the house
(c) It is an investment:
The third most important benefit of owning a property is It’s an investment before going to the topic first of all What is an investment? An investment is a monetary buying of an asset with an expectation of profit or income
That was the definition of investment, Now what does a property do, If you are buying a property wisely with a long term vision, it will give a profit in future Note this thing this will be helpful in comparing rent vs buy
(d) Monthly recurring income:
The next benefit is you will get paid on a monthly basis you are rented out that property
That monthly income from a property gives you a sense of security because there is no risk of losing any money if in some cases the tenant is not giving you rent, So what should you do?
If the tenant is not giving you money from 2 months Cut that money from security that he/she deposits
4. CONS OF BUYING IN RENT VS BUY
(a) Less Flexibility:
The first and biggest disadvantage of buying a house is flexibility.
If you are owning a property and live in that property It is more difficult to move to another place than living in a rented house if you are the owner of a house only you and you are responsible for that house
(b) Lack of Liquidity:
The second disadvantage is Lack of liquidity, Firstly what is liquidity?
Liquidity is the availability of cash to meet short term debt/operations, If you are owning a house and in case you need some cash for repayment of debt or any other need,
In the case of the house, you cannot sell it immediately it takes time, some times days, weeks and even months
(c) Maintenance Cost:
The next disadvantage of buying a house is if you are the owner of a house and you rented it to someone, then you are responsible for maintenance,
Maintenance Cost include Lawn Clean, Plumbing, Electrical and roof repairs and other are include in maintenance even if you have insured your house you have to pay that too
Things to keep in mind while buying a house
1. Location:
Location is the most important to keep in mind while buying a house. If you choose a great location with a small house chance you would get much return but
if you choose a not so good location with a big house chances are you would not get much return that’s why Location is so much important
2. Deciding the house price:
Buying a house is a huge investment and buying a house for the first time for family makes you happy and excited
First I suggest to calculate your budget using RENT VS BUY CALCULATOR
Because sometimes due to happiness and excitement People buy expensive house and then they don’t able to pay the mortgage payment
6. RENT VS BUY CONCLUSION
