Should You Buy or Rent?

A family intending to buy, build or to rent a house has to do considerable preliminary thinking in order to take proper decisions. The ability to recognize excellences in appearance, function, material and workmanship is an invaluable asset which one has to consider.

While choosing a house, where maximum of one’s time will be spent, requires careful planning and consideration. One should decide upon:

1. What kind of place do I require according to my budget? Would it be:
(a) House – detached or semi detached
(b) Large bungalow
(c) A flat
(d) Rooms in a house

2. What other things one has to decide are:
(a) Who will be staying in it: whether one requires the house to live on his own or with parents?
(b) Will children and old people be staying in it?
(c) How much will you be able to spend on the house from the family income?
(d) Would you like to and can afford to rent, buy or to build your own house?
(e) Would you require a finished or unfinished house?
(f) Will the house cater to the living habits of the family members?
(g) Will that house fulfill your future housing needs?

Rent or buy? Apartment? Single-family house? There are many decisions to make. You will have to look at what kind of housing suits your lifestyle and whether renting or buying is a better choice for you at this time.

You will have numerous decisions to make as you look for a place called ‘home’. In this article, your basic economic decision making skills will be used to weigh the pros and cons of home ownership and renting, and to analyze housing options. It's time to find out what is right for YOU!

Pros and cons of renting

Advantages

1. It will often cost less than to buy a house. There is no liability for upkeep, maintenance, and other aspects of home ownership that can be both expensive and time-consuming.
2. The money saved in renting a house can be invested in business, which would secure a large money return upon its investment; than would be the case if the amount is invested in a house.
3. Renting provides more flexibility and mobility. One is free to change present jobs for better ones. It also offers mobility when one has to move frequently due to job changes and family changes (getting married, having children, etc).
4. The renting family can adjust early to shelter needs. They are free to move when conditions become unsatisfactory or when better accommodation is available elsewhere.

Disadvantages

1. Chief drawback of renting is lack of control over the property. The repairs and general upkeep of the house is in the hands of the owners; if they do not do this well and punctually, you might be fixed with unpleasant (or even dangerous) living conditions (from leaking faucets to broken windows) for some period of time.
2. Property owners can raise the rent (with proper notice), making your costs higher.
3. Restrictions on the property, such as not allowing children or pets, and not permitting you to do redecorating, can also be there.
4. A renter cannot easily find a house of his own choice in the neighborhood desired.
5. Quarrels between the landlord and tenant are also very common these days.

Pros and cons of buying a house

Advantages

1. Home owner is the master of his own dwelling. He does not have the fear of being ordered out and the day to day increase in rent.
2. Home ownership is a pride and security.
3. One can make the changes in the house according to requirements and choice. One can remodel, improve or fix as and when one requires.
4. It is a permanent asset whose value increases day by day.
5. One can even buy pieces of furniture suited to the dimensions of the rooms and space available as there is no fear of being ordered out.
6. There are several financial advantages including equity; tax deduction for mortgage, interest and property tax deductions. Building up financial equity in a home is one benefit of home ownership. Since most homes increase in value over time, the owner's equity increases.

Disadvantages

1. It costs more to own a house then to rent it. One has to curb expenditures, cut down pleasures just to own a house.
2. If property value declines, the investment made in a house is a waste for the amount spent.
3. House ownership ties a family to a given location.
4. Home owners have to pay taxes: house tax, water tax and other tax relating to property.
5. The maintenance of the house is another burden. If one does not make the required repairs and does not do the repainting of the house, the property depreciates.

You have many decisions to make about your first housing choice. The first thing to do is to analyze your space needs and lifestyle. When you have done that, you also need to analyze the financial pros and cons of renting versus buying. Availability of money, and a lot of other factors discussed at the beginning of the article will help you decide which is the BEST option for you.