How To Decide Which Is Better For You: Renting Or Buying?

In the Pakistan, majority of people prefer ownership. This is partly because of the decades-old generational trend that being a homeowner is the key to happiness and part of the Pakistani dream. Real estate is also big business for everyone, from mortgage lenders to real estate agents to home improvement stores. It is a part of our cultural mindset and economy. However, it’s important to remember that owning a home isn’t always better than renting, and renting is not always as simple as it seems. Consider the advantages and disadvantages of each to figure out whether renting vs buying a home is good for you.

Are you worried about renting vs buying a home?

Renting vs Buying: An Overview

Choosing to rent or buy a home is a major decision that affects not only your lifestyle but also your financial health. There is no definitive answer to this age-old cultural mindset. Your decision should depend on your personal family and financial situation along with the current market trends of real estate and economic situation. So, to get it simply, the answer to your renting vs buying problem is that ‘it depends.

Real estate ownership of home, apartment or land is considered as an investment that is likely to build equity and tax deductions. Renting also has its Pro’s, including little to no responsibility & flexibility. However, people often believe that buying a home, rather than renting, is a more financially sound and safe decision.

RENTING VS BUYING QUESTIONS YOU SHOULD ASK YOURSELF BEFORE FINAL DECISION

Before we discuss the advantages and disadvantages of renting a house vs buying one, here are a few questions you need to ask yourself and discuss with family. This will help you figure out which of these options suits your position and work best for your situation.

Following are the questions you should consider

1. What is your current budget overall?
2. What are your long-term career & family goals?
3. How long do you want to live in the area?
4. Do you prefer stability over flexibility or vice versa?
5. Will you be able to pay for home repairs & maintenance?

How much money you can invest in a property? How many people will live there in the not-so-distant future. And if you actually want to live in that area for more than a few years are some of the most important things that you need to consider. Once you know for sure how much money you can spend and if you can keep up with the maintenance and repair costs that come with owning a property, you can go ahead and make your final decision.

While you figure out where you stand on the renting vs buying spectrum, you can take a look at some of the advantages and disadvantages of renting a house as well as buying one.

RENTING A HOME

For most young people, buying a house is simply not an option because of financial  budget restrictions. However, if you are stuck in a rent vs buy a home debate, here are a few advantages and downsides of living in a rental home that you must be aware of.

PROS OF RENTING A HOME

There are quite a few advantages of living in a rental property

These are some of the most important benefits of renting a home.

1. Increased flexibility and freedom
2. More opportunities
3. Less paperwork
4. No home maintenance cost
5. No need to pay property tax

CONS OF RENTING A HOME

There are also quite a few downsides of renting a property

1. Lack of Stability: can be forced to move, no guarantee the agreement will be renewed
2. No Equity
3. Rules and restrictions
4. Rent increments every year
5. Moving expenses/ shifting

BUYING A HOME

Buying a house is a huge milestone in one’s life, which means you can’t make this decision on a whim. Here are a few pros and cons of buying a house that will help you figure out if ownership is the right choice for you.

PROS OF BUYING A HOME

When it comes to buying vs renting a house, the former has quite a few upsides

1. Security and stability
2. No Restrictions
3. Opportunity to generate passive income
4. Ownership

CONS OF BUYING A HOME

Here are some of the disadvantages that comes when you buy a home

1. Requires substantial money
2. Value depreciation
3. The added cost of maintenance & repairs
4. Less flexibility and freedom of changing location

Needless to say, there are advantages and disadvantages to both renting and owning a property. While your financial status is important in determining which option is best for you, it isn’t always about money. When considering whether to rent or buy a property, you need also consider your own goals to see what is best for you in the long run.