When it comes to moving into a new house, buying versus renting out a house is one of the most important decisions that a buyer makes. Not only does it affect how much spending money you have at the end of the month or year, but it also changes your lifestyle and how much money you save over the years.
Every day, there are buyers out there who rent out a home that they would have been better off buying and vice versa. Out of these two options, the bias seems to lean more in favor of direct ownership; it is a big business and a major source of income for mortgage lenders, home investors and other small businesses.
People choose to buy homes, it seems, to favor their chances of receiving tax benefits, such as tax deductions and a better and more stable savings account. Renting homes is also popular because of the near-minimal responsibilities, and the ability to pick up everything and go whenever you want. This is something that you cannot very easily accomplish when you own a house or property.
In more black and white terms, home ownership brings about a feeling of belonging and communal enterprise. This is not perfect for everyone, though; people with nomadic and fluent personalities find that this can become a drag-down rather quickly. Real estate is and always has been the original ‘illiquid’ asset. This means that whether the housing market is up or down in a bubble or a crash, you may not easily be able to sell your house for any profit at all, and quickly, too.
Even if the housing market is stable, there are immense and significant trading costs when you decide to sell; this can be a major off-put to a lot of consumers who are trying to decide between buying or renting out a house. What this means is that deciding to move and go somewhere out of your bubble is not easily accomplished when you own property.
Renting a house means that you can move whenever and wherever you want without any repercussions, and you can do it very fast, too. However, if your landlord decides to kick you out or sell the property, it means that you can be evicted with a terse notice.
That is the most outstanding negative aspect of renting a house, apartment, or any property by far. What happens if your landlord gets sick, and has to sell the property? What if your landlord turns out to be not such a great person, and decides to evict you over some small disagreement? Keep in mind that this has in fact happened before, and you are not the only ones who have been unlucky enough to be stuck in this case.
Also, the biggest myth about renting homes is that you are potentially ‘throwing away money.’ This is simply not correct, and for many obvious reasons; you obviously need a place to live, and that will cost you a pretty penny, either way, you decide to look at it.
What being a direct homeowner means is that you will be paying a lot more than if you were to rent it, even over the same ten year period or so. You have your property taxes, pest control, maintenance, insurance, and other kinds of fees.
So, all in all, it comes down strictly to what your budget is and whether or not you want to dig down and be rooted in a particular area. Both renting and owning houses have their respective pros and cons, of course. Which one is better for you is different for everyone and in this case is entirely relative.
Take a look at the video for more pros/cons to home ownership and renting.