Renting Or Buying?
There are obvious benefits of owning a home such as pride of ownership, status symbol, creation of asset and wealth, privacy, and feeling of freedom to customize according to your own liking. However, buying a home is a massive financial decision involving lots of money and a long commitment to a lender. Therefore, large numbers of individuals and families continue to live on rent. Here are the pros and cons of both owning a home and renting.
Pros of renting
*You pay small amount of money up front and enjoy living in a home
*You have no responsibilities towards upkeep and maintenance of the rented home
*You can easily move out and rent another home. Relocation is easy when you get a better job in another city.
Cons of renting
*Landlord can increase the rent every year
*Moving from one place to another can be difficult and costly
*You have less privacy and little freedom of personalizing the space
Pros of buying a home
*Pride of ownership
*Lots of privacy
*Freedom to update and renovate according to requirements
*No one can kick you out of your home
*You’ll enjoy the equity even if you cannot pay mortgage under financial stress
*Ownership is a form of forced saving which allows you to create wealth
*You enjoy tax deductions when filing income tax returns
*Your home grows in value over a period
*You become rent-free after you have paid the mortgage
Cons of buying
*Relocation becomes very difficult. You cannot move to a new place because of your commitment to the lender.
*You need large amount of money to pay for down payment