Whether you are for buying or renting a piece of property, this argument—about whether to purchase or lease a place to live in—is almost as old as time. Some claim that buying a home is a wise decision because it means that you will eventually stop having to pay for rent at some point in your life, and you gain equity. On the other hand, people say that renting is a much wiser option because it means you will not be stuck paying the same mortgage for the rest of your life.
Both arguments definitely have their own pros and cons, but how will you then know which one you should go for? While there is no one answer that can suit every single person on the planet, there are certain factors that you have to consider so that the answer can become much clearer to you. In this article, we will talk about the pros and cons of buying and renting, and why you would want to choose one option over the other.
The Case for Buying Your Own Place to Live In
Pro: You will eventually have a place of your own, filed under your own name.
This one may seem like more of a form of having some bragging rights, but it is hard to deny the social status that you can gain if you can say that you have bought your own home with your own hard-earned money. Plus, at a certain point, you will eventually no longer have to shell out any additional money in order to stay there, compared to renting a place, where you will have to put down money for a long period of time to stay there, and you will not end up with a property that you can call your very own.
Con: Your house might not actually be worth all that much in terms of today’s money.
Sure, at least you can say that you fought off the effects of inflation in some way, so that your money did not end up simply depreciating in the bank. However, that is assuming that your home actually did increase in value, and did not depreciate, either. That can be hard to tell, especially given the housing crisis that shook the world a few years ago. Who says that the same scenario would not happen again? Plus, your house is not exactly in cash form, yet, not until you sell it, and it can be hard to sell depending on the state of the economy. Instead, just invest your hard-earned cash into actual cash investments. At least you will not have to deal with the headache of listing your home and walking potential buyers around. According to an article on CNBC, you must also consider what is often called the Breakeven Horizon.
Prices of Sentosa Cove Condominimums Down A Whopping 36% From Its 2011 Peak. Image Credit: 99.co
The Case for Renting Your Own Place to Live In
Pro: You will have a much more flexible lifestyle.
If you are the type of person who is always jetting from one country to another, then renting is absolutely perfect for your needs. You can even easily find a good number of service apartment on a property listings site called PropertyGuru Singapore, which is popular due to its ease of use and as well as its large database. But this kind of living situation is not just for people who love to travel; it can also be for people who have to constantly go from one continent to another in order to conduct business meetings and other such work for the office. For example, if you were to be promoted but it requires having to be relocated to a completely different part of the globe, then you would be in a lot of hot water if you found yourself tied to a mortgage contract that will not end until a decade or two (or three) down the line.
Con: You may not be able to customize your home as much.
If you are the type of person who lives for home improvement and modifications, then you might be in for a sad day-to-day experience if you decide to lease a property instead. While there are some landlords who might allow you to do a little improvement here and there, most landlords forbid you from adding anything to their units for fear of you breaking their purchased property, as well as making things more complicated once you finally move out and the new tenant does not like the improvements that you have made.
Questions You Can Ask Yourself to Make a Better Choice
According to an article on The New York Times, there are quite a number of things you could think about in order to see which option would be the best for you in the long run. Here are a few of them:
• Are you planning to stay in that location for a long period of time, perhaps over several years of your life?
• Do you have a high tolerance when it comes to anything involving large amounts of risk, in case the value of your home depreciate in the future?
• Will you be able to pay for all of the costs involved with buying a home, including taxes, insurance, and even closing costs?
In Conclusion: Look at All Possible Points of View Before Signing Any Contract
Just remember that no one solution fits every individual, because every single person has a very specific set of needs, wants, as well as the current situation they are in; such as how financially stable they are and what they want to achieve in their life. Regardless of which option you choose, make sure to base your final decision on your own needs, and do not do something just because somebody else said that it worked for them and that it is the one right answer for everything. With a much more critical way of looking at the world and at the real estate situation, you should be able to make a grounded decision with both your feet on the ground instead of basing things on gut feelings and premonitions.