The issue of whether to buy or rent a home has been one of the most debated in the world of real estate economics. Now, when you look at the two options, you will definitely be drawn to the feeling that buying is far better than renting. One of the major reasons why people buy homes is to have the opportunity to build equity with the property. However, the recent effects of the credit crunch that affected the whole world opened a new dimension to this and buyers now check and double check to ascertain the reality or the amount of equity they can build on each home. However, apart from these, the desire for humans to enjoy both financial and physical freedom is still pushing people towards buying more than renting. Are you relocating to London and wonderis is it better to buy or rent a house in London? Check pros and cons of buying vs renting a house.
However, to have a very comprehensive look at this, we have to examine the reasons that are appropriate for you to rent
and the issues that will push you to buy. These will now educate you on the best time to rent and the best time to buy.
When you consider the concept of renting, which is actually the first system you have to adopt before you think about buying, you have to concentrate on the flexibility of this option. Now, when you rent, you have the chance to study the area and know about it before you seek for ownership. If you do not have the best information about a particular area and needs to get this, renting will do the magic for you.
Another situation where you will need renting more than buying is when you have a career that may see you
another area. If you have any form of career uncertainty that may include transfers in your present job or landing a
new job in another area, then you need to rent. This is because buying will definitely tie you down in the old place and you
wouldn't want to spend the funds to buy only to be sent away to a farer place soonest.
You should also rent a house when you are uncertain about your means and level of income. Changes in your income in the future may limit your ability to borrow and even prevent you from paying your mortgage. If this uncertainty is there, don't buy, rent, since you can easily move away from the current rented home and seek for a cheaper one anytime.
We have said that renting home always comes before buying. Now, you can use renting to prepare for buying. When you keep a perfect on-time rental payment, it will qualify you for a mortgage. Again, when you rent, you will enjoy less stress as caused by maintenance. There are no maintenance expenses like leaking pipe repairs and others. Another area is the numerous utilities paid by the landlord, which you may not worry about as a tenant. However, when you rent, you have to be ready to accommodate fluctuations in the house rent. You will also not have your full freedom, as you must abide by the conditions from your landlord and the law.
Now, when you take a good look at buying a home, you see that there are also some huge amounts of benefits.
The landlord pays his or her mortgage through the tenant, so whenever you pay your rent to your landlord,
you are helping him pay his mortgage and thereby adding the needed equity to his bank account. But if you are
paying these for your own home, you are increasing your ownership level of your home.
Now, when you buy and continue the payment of mortgage for about 7 years, you must have finished paying for the home through accrued equity and the increase in the value of the house in question. With this development, you can use your home equity to borrow from the mortgage people, even to the extent of borrowing to get a new home. Your property tax and mortgage interest can be deducted from your home and you can even refinance at better rates.
When you buy, you have control on all angles, both in the area of creativity and otherwise. You hang as many pictures as you like on the wall and you design and grow the garden as you wish. Now, you have the sole discretion of making the maintenance choices if you are living in your home. You can elect to invite the contractors, while you can even choose the self-made maintenance, so far as you can do it well. This saves lots of funds for you.
But if you are on rent, you have to abide by what the majority agrees on. This may involve a monthly fee. The contractor invited may not be good enough and many other things. All these mentioned facts are coupled with where you live, the market as at the time you are renting or buying, your maintenance choice and others.
Before you conclude on buying or renting, you have to choose by asking yourself these very important questions. Buying will have the upfront fees spread within many years for convenience. Now, if you are to be staying longer in a place, then buying is obviously the best method for you. You should also consider the mortgage-interest tax deduction. The level effects the rents, selling prices and the price of stock will affect your decision too. You should also consider the inflation rates, investment return rates and the property taxes. You have to know that buying a house comes with lots of extra expenses like the insurance, brokers fee, security deposit, the monthly common fee, land use charge and many others. Consider the cost of all these and know whether you should buy or rent.