Owning vs. renting both come with different advantages, and what is best for you often depends on your circumstances. In this blogpost, we will discuss some of the things to keep in mind to weigh the pros and cons of home ownership vs. rentals.
Ownership
Owning a home requires some serious planning a head as it is a big financial commitment. It is important to consider what your budget is, plan out your financial and savings goals in order to be able to visualize it easier.
If you need a mortgage, it is important to remember that most mortgages need a down payment. You are likely to get better terms if you are able to put down more money.
Ownership offers you the flexibility to customise and update your home as you wish, it is yours after all! You might even do some renovations and maintenances that increase the value of your home, which is always a positive thing.
The values of homes can increase and decrease as time goes on and you can build equity with home ownership, which could increase your wealth.
Rental
When renting a home, less money is spent upfront. Most landlords will ask for a deposit, which could be 2 months’ worth of rent, this is still likely less than what you would pay as a down payment for home ownership.
Customising and personalisation of a rental will be much more difficult, you will have much less freedom. However, repairs wherever needed may cost a lot less. Your landlord will likely be the one who is responsible for fixing things like leaky faucets.
There is the potential that your rent increases as time goes on, unfortunately you have limited control over this.
Moving is much easier, if you want to relocate to a new city or just move houses, you have less responsibility when you leave a rental.
The question of costs
Generally, renting is much cheaper than buying which frees up money for other things such as growing your savings. However, buying a house is an investment whereas renting is just an added cost. So it might be smarter to invest your money and buy a property, should your finances allow for it.
