Is Buying Your Own House Wiser Than Renting?
When it comes to deciding about living conditions, one argument always comes up first among others. Is it better if you just rent or buy your own house.
You’re not likely to lose a lot of sleep over it but you should give it enough thought, especially if it will affect your current financial situation and your future living condition.
Before coming up with a decision, you should be able to determine if you’re ready for what renting or buying your own house would entail. They’re both decisions that could affect your lifestyle and finances, and you should clearly define your purpose in choosing one over the other while considering a lot of factors.
Can you afford to buy your own house now?
Remember that house prices vary from one place to another. Same with deposit requirements, which differ from one seller or building society to another. If you’re planning to own a home in non-commercial districts, the prices there are likely to be lower while the deposits may be a tad higher.
Rent, on the other hand, may be substantially more expensive in business districts like London, as most people are there for work - whether for a few months or a few years. They’re more inclined to rent flats within the city centre as it’s closer to where they work, so rent is relatively higher.
Are you looking for an investment?
Granted you’ve paid the mortgage off over time, you can actually do whatever you want with the house: resell it if the value dramatically increases, rent it out, or use its equity to get a loan and start a business.
If you’re renting, you’re less likely to be able to do any of it. At the very least, you can sublet a spare room, if your landlord agrees to it.
Can you still afford to rent upon retirement?
Your pension and retirement benefits are at question here in terms of being able to afford rent, unless you really have saved more than enough. As opposed to owning a house, you’ll never have to worry about checking yourself into a retirement home; or worse, getting evicted as you can’t pay the rent anymore.
What do you want to do with the house?
Besides leveraging on its value for investment opportunities, owning a house gives you the freedom to do whatever you want with with. You can renovate whenever you want, and decide which parts of the house needs taking down and which bit needs a redecoration. This is something you won’t be able to do when renting.
On the other hand, you’re likely to worry less about repair and maintenance when renting - your lease agreement would state that your landlord or the manager will take care of it. Whereas with owning a house, you have to arrange the maintenance work, shoulder the expenses, or worse, do it yourself.
Do you need to move from one place to another at a prolonged period?
If you’re young and always on the go, renting would be a lot more ideal. If your work requires you to be relocated and stay there for a while, renting could also be very wise. It reduces your worry of having to resell or rent out the house, or find someone to work on it, especially if you need to transfer immediately.
However, if you choose to rent for a while even if you’re not on the go, because you intend to save more money for the deposit and other house-buying expenses, you could be missing out on great mortgage and property deals.
In a nutshell. there’s really no definite answer as to whether renting is wiser decision over buying. It all depends on your ability to afford, your lifestyle, work conditions, and other things. Renting and buying your own house are both big decisions that you need enough time to properly think of.