Table of Contents
Introduction
Whether to buy or rent a house is a substantial dilemma that faces numerous people especially young adults who are new at their jobs and beginning their lives. The conventional wisdom for a long time was to buy a home as soon as possible. However, a significant number of people prefer to rent their homes. Both renting and buying homes present diverse benefits and drawbacks among other factors that require extensive considerations to ensure a wise decision that safeguards the financial stability of a family. Renting remains an easy choice which is equally preferable by many people in different countries across the world.
Renting presents numerous advantages. First, the tenant does not have the commitment and responsibility for repairing and maintaining the property. A tenant lives in a compound freely and often takes up most of the complaints with the property managers. The lack of the maintenance and repairs frees up money thereby enabling a tenant to invest in a business or pursue other economic priorities. Furthermore, renting a place makes relocation easier than owning the house. Most young people have not settled in their careers. As such, they will always pursue new opportunities a feature that demands that they move from town to town. Renting makes movement easy and equally cheap. Renting further protects an individual from the real estate market with its fluctuating patterns including a potential decline in the value of the property. Renting also has minimal credit requirements thereby enabling numerous young people to afford decent homes. Likewise, the rent covers the cost of most utilities like cable television and water in some areas thus making renting a more comfortable and equally cheaper option than owning a house.
Besides the numerous benefits, renting a house has equally numerous drawbacks. First, a tenant lacks the opportunity to build equity. A tenant does not build any form of equity irrespective of the number of years or the exemplary nature of a tenant. If one plans to stay in a location for a long period, buying a house becomes a better and smarter option than renting. Similarly, renters do not enjoy any form of federal tax, unlike homeowners who can deduct mortgage interest or property taxes from their federal tax returns thereby maximising benefits. Renters have equally limited control over the housing costs. Property owners have the freedom to increase rent especially after the expiry of the current lease agreements. Furthermore, renters have limited housing security. While numerous territories have sufficient renter protection laws, the laws do not safeguard the ability of a renter to renew their leases. Such landlord retains the right to admit new tenants or renew contracts.
In retrospect, renting has both benefits and disadvantages. The long-term effects of renting are both positive and negative depending on how one approaches the issue. Renting can, for example, free up capital thereby enabling an individual to invest money in alternative businesses. However, renting presents significant insecurities including limited control of the housing costs, and housing securities. Numerous factors influence the decision to either buy or rent. A considerable weight lies in the non-financial and subjective factors. Irrespective of the factors, purchasing a house presents significant securities and contributes towards the building of equity which enhances the financial security of an individual.
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