It is a dream of every individual to buy a home in his name. Buying a home not only creates an asset that he can enjoy for the rest of his life with family members, it also creates wealth for his future. However, there is no dearth of men and women who prefer to live in rented properties as they believe ownership brings in its wake many associated costs and responsibilities. Let us find out what is better for you, buying or renting?
- You enjoy living in a property without any worries of its repairs and maintenance
- You can easily move in to another home if you get a job at another place
- You have to pay increased rent year after year
- You cannot make modifications according to your requirements in a rented property
- You enjoy ownership rights with many tax benefits
- You benefit from price appreciation of your property
- You can avail a loan from built up equity in the home
- You become responsible for repairs and maintenance
- You pay for the insurance as well as property taxes
- You make long term commitment to the lender for mortgage loan
Many experts say that this debate of buying vs. renting is a pointless debate. This is because one should think about buying a home only when he is settled in his career. He should take a step in this direction only when there is income stability and he has saved a decent amount of money in his account. Buying a property is a huge financial decision as one has to put forward nearly 20% of the value of the house as down payment to the lender. He has to then enter into a long term commitment with the lender as he has to continue paying monthly installments for the next 15-30 years.
You should buy a home when you feel you are ready for it. If you are in a stable job with chances of promotion, you know you can easily shoulder the burden of monthly installments. Buying makes sense when you want to live there for more than 7 years. Most people are looking to buy a house in a good location with access to all modern amenities. You should buy the house in a neighborhood that is safe and where there is a trend of price appreciation over the years.
If your circumstances are unpredictable, it makes sense to continue to live in a rented house.
Jesse Sasomsup is an owner and CEO of PMI Golden State, a property management company located in Sherman Oaks, CA. PMI is one of the largest property management network with over 200 offices worldwide.