We have all heard people saying renting is dead money and have been advised to buy, but it’s not always that easy.
With the recession playing havoc with people’s lives many have found themselves at their parent’s home for longer than they’d have liked.
Many people are staying at home in the hope of saving a deposit, but as time moves on the patience of staying at home may wear thin and you find yourself renting in the bid for independence.
For many there is the worry that once you decide to move out and rent you may never be able to get onto the property ladder.
As rental prices are increasing, saving for a deposit becomes more challenging.
However, is the constant struggle to save, save, save money really worth it?
At this point I would ask myself a question: Should I rent or buy?
Is Renting Really “Wasting Money”?
The cost of buying vs renting soon adds up as home insurance, property tax, legal fees, mortgage arrangement fees and maintenance will soon bump up the costs compared to renting.
People say renting is throwing away money, but money spent on any other service is not “thrown away”.
For instance paying for food, the gym or a car isn’t seen in such way.
True you won’t have any financial return on that money, but the purpose of renting is so that you have somewhere to live and not always for an investment.
You are better to invest in the stock market if that’s the case.
A large amount of money from a bought house will be “thrown away” as mortgage interest will rack up over time.
In the first 5 years, approximately 80% of your monthly mortgage payment goes towards interest.
Shockingly, it is only after a 20 year period that the homebuyers will be “throwing away” less than the renter.
Buying your own home vs renting is seen as a forced savings plan, but would you voluntarily sign up for a savings plan where well over half of the money you’ve put into something for 20 years disappears?
Through renting, your landlord is responsible for any repairs, maintenance and decorating to the property, so you won’t have to fork out for an unexpected pipe burst or other issue.
However, the lack of freedom that comes with this may be frustrating.
Any renovations or home improvements will be to the landlords taste and they can also decide when it’s time you moved on.
If you are looking for somewhere to live quickly as a result of a job change, etc. many rental properties are furnished, so you won’t need to worry about paying thousands to fully equip a house that may have been otherwise empty.
Not to mention the price of having to pay for furniture removal vans.
“Benefits of Buying a House”
Owning your own home requires a lot more responsibility, but this also comes with benefits, such as security and knowing that you don’t have to move on when someone else tells you to.
You can also borrow against your own home and will eventually have an asset that you can pass on after you’ve gone.
However, in that case you won’t see any financial benefit unless you sell or remortgage and withdraw equity.
Buying your own home vs renting allows you to put your own stamp on a property.
It means you can have a stable base where memories can be built and where you can feel secure.
Buying vs renting allows you to remodel, redecorate and revamp your living space when you wish.
You are essentially more independent and less reliable on someone else.
Renting versus buying dilemma isn’t just about the financial aspects, but it is an emotional decision which will affect your quality of life.
There isn’t a better option, yet buying a home isn’t the definite answer as it’s always thought to be.
There shouldn’t be a strain to buy a house if you realistically can’t afford it, as you can get long term rental properties that you can make your home.
Having long term security and an asset is very appealing and there are options out there to help people get onto the property ladder if that is your ultimate goal.
What are your thoughts on renting versus buying? Which option is more appealing to you?
***If you like this article and find it useful, please feel free to share it on Facebook, Twitter and Google+ using floating social buttons bar on the left or simply leave a comment – we would like to hear from you!
so I can show you:
- - how to incorporate a healthy lifestyle into your daily routine
- - learn crucial steps to become successful in personal finance
- - get great dating and relationship tips to achieve a long-lasting successful relationship
- - and much more...
Love your job. Love your relationship. Love your life.