Should you Buy a house? Renting vs Buying a house in 2022


In today’s world, everyone has time to find the best opportunity for their life. This can sometimes lead to a temporary shift of your home to a new location. In today’s scenario, we can see that there are many companies who want their employees to keep shifting their positions to provide more exposure when it comes to the market.

Now in this situation, the primary question that one needs to ask is whether you want to rent a house or buy one.

To answer this question we have come up with this article, in this article we will discuss about the various advantages and disadvantages of buying or renting a home.

Let us first discuss the scenario of renting a house

rent house

Renting system is basically when you are paying a certain amount of premium to the landlord or the landlord for living in their premises. It is an agreement between all the owners of the house and the tenant. This agreement defines that the tenant must pay a certain amount to live on the landlord’s property.

As per the research, we can see that now private companies are shifting their employees to different places more often and this is the reason why people are preferring to rent a house rather than buy it. We can also see that the maximum number of rented houses are occupied by adults below the age of 35 years.

Benefits of renting a house

We can see that the number of rental houses is very high all over the world, especially in the US, but due to the COVID-19 pandemic, this number has come down as people move to their ancestral homes and work.

Now let’s talk about the benefits of renting a house

  • Less cost- By renting a house you reduce costs initially because when you are renting out a property you do not have to pay the cost of the property or any maintenance or repair bills. This way you do not have to pay a lump sum amount for the house property, instead, you can pay a small amount as rent. You can also save yourself from paying property taxes when you are letting out a property as it becomes the responsibility of the home owner to pay the tax.
  • Flexibility to move As per your new location it becomes very easy to find out where you are getting better opportunities as you do not need to take care of any house as you can move out anytime by just giving prior notice to the owner. Moving from a rented house to yourself and finding a new home on rent becomes very easy because if you don’t have a house of your own then you don’t have to worry anymore.
  • low initial costInitially if you want to buy your own house then you should either have a lot of money or you need to take home loan which really becomes a burden on your shoulder. Instead of buying, people prefer to rent a house as it does not cost much from the start of living in the house. You do not have to pay any processing fee and down payment on the house you want to buy.
  • access to facilities– You can use the features without making any investment. You may have to spend a lot of money to get good facilities in a new house whereas you do not have to pay for the amenities when you rent a flat.
  • wider choice– You get a wide range of options when it comes to renting a house to find the best one as per your taste, preferences and location. You can also change your home without worrying much. You can also negotiate with the owner for the rent of the house.
  • no long term commitment– You don’t need to give any long term commitment to anyone as it is a temporary settlement. If nothing goes well then you also have the option of shifting to another place and you can go somewhere which is cheaper and has better availability.
Renting vs Buying a Home in 2022

Disadvantages of renting a house

Despite having such advantages, there are some disadvantages that you may have to face while renting a house.

  • Notice period- You have to give notice period to the landlord and this is the biggest disadvantage of renting a house. When it comes to fixing the notice period, it is up to the landlord. It is the desire of the landlord that they want to give the house on rent for the next month or for the next period or else they do not want to give the vacant house on rent immediately. In such a situation it becomes very difficult for the tenant.
  • Rent increases – In a rented house, all the decisions are taken by the landlord. Your rent can increase at any time for any reason. In these situations, you have only two options: pay the additional cost or give notice to leave. And none of these options are pleasant as one will put more strain on your finances, and the other will make you go through the trouble of moving on.
  • Lost Money- The rent payment made by you is a loss for you. Instead, it goes into the homeowner’s pocket. The rent you’re paying doesn’t provide you with anything that lasts long. At the end of the year, the amount of rent you pay increases significantly.
  • No Customization: This means that the rental home cannot be changed to your preferences. You must accept the homeowner’s placement of the furnishings and furniture in the home. At most, you may be able to replace curtains or drapes temporarily and at your own expense. When you live in a leased home, there is also no sense of permanence.

Here are some advantages and disadvantages of renting a house.

buy a house

The next option for choosing a home is to own a home. It is the dream of every person to have a house where he can live with his family. There are many advantages and disadvantages to buying your own home that you should consider before buying your own home.

benefits of having a home

Owning a home brings the feeling of a dream come true for many people. And only people with decent level of income can become the owner of the house. It gives many benefits like

Renting vs Buying a Home in 2022
  • sense of permanenceThis is an important argument in favor of buying a house rather than renting it. When you own a home, you have a strong sense of sustainability. In many countries, buying a home is a significant life achievement for many. After all, you may be working too hard to pay off the mortgage. Your residence serves as your permanent address for all legal reasons.
  • Freedom to choose your own decorYou have complete freedom to decorate your home and yard however you want. You don’t need anyone else’s permission to decorate your home with beautiful interiors. However, if you are planning to replace some important housing structures, some permits may be required.
  • investing in a houseYour payment amount does not go to waste. To be honest, the money you have invested is made up of installments. This is because real estate prices continue to rise, despite a brief decline due to problems with the national economy, as we saw during the COVID-19 outbreak.
  • Upgrade possibility: If you decide to do so after a few years while still making money, you can simply upgrade to a better home. Because you own the home, you are free to sell the property whenever market prices are high. Get a bigger, better one for the same price elsewhere.
  • retirement home: You may not be able to pay a mortgage after you retire. However, if you own your own home, you will not have to worry about rent or any other associated cost. That same home can easily serve as both your primary residence and your biggest investment. And you won’t have to stress about living without a home in your golden years.

Disadvantages of owning a home

Owning a home can also bring different costs to the owner. We are mentioning some disadvantages which will give you the idea that you need to take care like:

  • taxes and other expenses– As a homeowner you need to pay various taxes, and will also be responsible for various expenses especially related to maintenance. This will also cover the cost of repairs.
  • opportunity cost– When you start living in the house you own, you need to bear the opportunity cost of leasing the house and earning. Since you are the owner, you have the right to lease your home to a tenant of your choice. The rent can be used to repay the loan for your home.
  • it becomes difficult to move– If you want to shift somewhere else it will be very difficult for you to just move. As you have the responsibility of your home which cannot be ignored. You may have to wait longer to get the right value for your home.
  • long term financial commitmentHome loan taken for home is a long lasting money commitment. And you have to ensure that your loan dues are paid on time to avoid default so that it does not hurt your credit score. Owning a home and not paying the mortgage will result in foreclosure and leave you homeless.
  • large amount of upfront expensesNot everyone can buy their own house because income can prevent them from buying their own house. This is a big problem as there are many people who cannot pay the monthly or other installments for the loan taken for their home. Since this will increase further expenses there.
Some factors you need to consider before buying your own home
Renting vs Buying a Home in 2022
  • home requirement– First of all you need to decide the requirement of the house like you need a house in a specific locality, or some specific environment, or need any specific infrastructure. There is also a need to decide about the structure of your house which includes the number of rooms, washrooms, kitchen, health facilities etc. You need to make sure that these requirements are designed keeping your budget in mind.
  • select locationYou need to decide on an ideal location that is suitable for you and your family. You also need to make sure it is a safe place or is cheap and within your budget. You should also try to keep in mind that the location of your home should not be far from the city as this will increase the cost of your transportation as well as the cost of accessing basic necessities.
  • design of house– The next thing you need to consider is to decide the design of the house as it will become the visual presentation of your home as well as your design will decide the cost and maintenance required for the construction of your home. If you keep your design too unique it will cost a lot and get expensive.
  • cost of utilities– You also need to calculate the cost of obtaining utilities like electricity, water, gas etc.
  • mortgage to build your houseYou will also need to calculate the mortgage amount required for the construction of your house. You have to make sure that you are getting the amount that you will be able to pay in future without putting any extra burden on your shoulders.

conclusion

These are some of the advantages and disadvantages of buying or renting a home that will help you make a decision seeing that you are not increasing your costs and getting the best out of it.



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