Choosing to rent or buy a house is a major decision. On one hand, renting is easier on your wallet in the short term especially if you don’t plan on establishing yourself in a certain area. On the other hand, it can be impractical; once you start renting after a certain amount of time, the total money you’ve paid could have been used to put a down payment on a property that could have been yours.
In the United States, the average monthly rent is $1,471 per month, while the average price of a house is $226,800. While both options get a roof over your head, choosing the wrong option can affect your savings, available money for living expenses, and the lifestyle you have.
So, is it more practical to buy houses? Or should I rent? Well, it really depends on your situation.
Renting
Contrary to what some people might say, renting does not always mean throwing away money. In certain cases, it’s more practical to rent than to buy property. Renting means you don’t own the property (your landlord or lessor does), but you pay them a monthly rent for the right to live in it. It’s ideal for nomads and those willing to relocate for their family or career prospects.
While living in the property, you cannot renovate the house or make permanent changes to it unless you have the landlord’s approval. While the landlord is responsible for major repairs, you are responsible for paying the utilities you use. So, there are many key advantages and disadvantages to renting, namely.
Flexibility
Renting property means you’re not tied down to one location. If you own a house in San Francisco, you can easily get to work if you live in that city or neighboring cities. But even with a car, it will be impractical to work a 9-to-5 office job in Los Angeles. So, if you see better career opportunities in LA, you have to rent a home there while still having to pay the costs of owning a house in San Francisco.
In comparison, if you are only renting in San Francisco and find better career opportunities in Los Angeles, it’s easy to terminate your lease and find another place to rent in LA. If you’re the type who is willing to relocate for better opportunities, it may be better to rent until you decide to settle down.
Predictable Expenses
When you rent, your housing expenses are fairly predictable: rent and utilities. You aren’t responsible for emergency or major repairs as it is your landlord’s responsibility. On the other hand, if you’re buying property, you’re responsible for repairs whenever it’s needed.
No Control Over Rent and Property
As the owner of the property, a landlord has certain rights. And even if it’s not a law, if they put something in your rental contract that gives them a right to do something (and if it’s legal that it can be upheld in a court of law) it’s acceptable if you signed the contract.
For example, if your current rent is $1,500 a month with two months left on your lease, your landlord can choose to increase the rent to $1,700 if you want to renew your contract. You can try negotiating with them, but ultimately it’s their decision and you either have to agree to pay the increased rent when you renew your contract or find another place to live.
Landlords have a right to ban pets from their property, so if you have a pet or want to adopt one, some property options aren’t for you. If you have a growing family, you can’t renovate the house to build a second room for your child because the house isn’t yours to renovate.
Why Buy Properties?
Buying properties can be profitable if you look at it as an investment for earning income. But if you’re simply looking at it as buying a place to call your home, the costs of owning a home are actually higher than renting. Even if your mortgage is equal to or lower than the cost of rent, the cost of taxes, maintenance, insurance, repairs, and other hidden costs pile up.
Some people argue that renting is impractical because you’re wasting equity and throwing away money that could have been saved for buying a house. But in reality, if you’re saving for a house, you’re not doing much with that money you’re saving either. And even if you buy nice property now, there’s still a chance that your property’s value can decline.
Still, buying property is a good option for those looking to establish their roots. Buying property gives you the freedom to make certain calls about your property that you can’t do while renting. You can choose to redecorate, redesign, or even renovate your home. You may be responsible for major repairs, but at least you ensure that these repairs are done right rather than done fast.
