Rent or buy. Which is better?
This has always been a topic of discussion among real estate experts, mortgage industry players, aspiring home buyers and renters alike.
A lot of individuals agree that renting is a better idea for a number of reasons. One of those reasons is that if you rent, you won’t have to worry about dealing with maintenance and repair issues. Being exempted from paying real estate taxes is another.
On the other hand, many also agree that buying a home makes more financial sense. Here are some of the reasons why homeownership is still better than renting.
A sense of permanence
In a report on CNBC, David Bach, a self-made millionaire, gave clear advice to aspiring Millennial homebuyers. He says that buying a home is a better investment since you will own a property where you can live permanently.
Bach says that renting only helps landlords get more profit. It’s better to invest your money into something that you’ll benefit from. As a result, he wants to see individuals prioritizing homeownership as early as possible for their own good.
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Full control over the property
Usually, you don’t have a lot of freedom if you’re only renting a place rather than owning it. Depending on the landlord, you can only do minimal changes if they allow it. Homeownership, however, gives you full control over what you want to do to your home.
Since the home is in your possession, it means that you will have complete freedom to do whatever you want to do to it. You can definitely add a room, build a garden, remodel a basement, or do anything that can make the house feel more like home.
Your home builds equity over time. Compared to renting, you’ll be able to see your home’s value increase the longer the property is in your possession.
Having equity is an important asset for you as a homeowner since you may use it to your advantage in the future.
The equity you build over time can benefit you if ever you decide to relocate then sell your home in the future. Other than that, you can also use it if ever you plan to refinance someday.
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Fixed mortgage payments vs rising renting prices
Renters will always have a risk of facing rising rent prices every year. Therefore it doesn’t really show budget stability compared to paying off a fixed-rate mortgage.
While there are rent-controlled apartments or neighborhoods, a fixed mortgage also remains the same throughout the life of the loan. That means it shows stability in budgeting your finances plus the property is all yours.
Buying a home makes more financial sense
The possibility of the rent versus buy debate will always pop up here and there but it’s also important to emphasize that the decision to go choose one option over the other depend on every individual.
Let these reasons be your guide if ever you’re facing the same dilemma. In the end, you’ll have to decide what’s best for your situation.
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