Renting A Home Or Buying A Home – Which Is Better?
These days, people plan to buy their own home much earlier due to exceptionally low mortgage rates, and exorbitant rentals in Australia. Many individuals are encouraged to buy their own house rather than renting. On the other hand, some have fear of the low or even negative returns from the property. Thus, when it comes to making the decision of renting a home or buying a home, it needs to be carefully made.
After weighing the pros and cons, you will be able to make the final decision easily. Checkout the advantages and disadvantages related to the issue of buying or renting a home below.
Benefits of buying a house
- Home ownership encourages a healthy lifestyle and makes you more involved in the local society.
- Even if you don’t have enough money to buy the home at present then you can avail a home loan. It is easy to offset the mortgage cost fully or partly if you invest wisely. After repaying the home loan fully, you will be the proud owner of your home.
- The home value rises annually from 4% to 6%. As a result, the housing finance becomes the rewarding option for the borrower who has applied for housing finance to buy the home. Furthermore, homeowners can build the equity even if the home value does not rise.
- With the regular EMI payments of your home loan in Australia, you can avail the benefits associated with taxes.
- At your own house, you need not to take the approval of owner for renovation work. Whenever you feel like, you can easily renovate your houses with tiling, redesigning, painting and more.
- The rental money increases every year and when it comes to fixed rate home loan, the principal component, and the interest remain the same. Furthermore, you need not to worry about the interest rate fluctuation.
- Living in rental homes is difficult. You need to worry about many things such as packing and unpacking while shifting as the landlords can ask the tenants to move at any time.
These are some of the advantages of buying a home. Conversely, some cons of buying a house are also there. Have a look at some of them:
- Homes can’t be sold on a short notice and if you suddenly need to arrange the funds then it can be a difficult situation for you.
- It is not possible to avoid the regular expenses related to home such as property taxes, maintenance, society changes and more.
- It is difficult to get no deposit home loan and thus you may have to make hefty sum of initial down payment when applying for home loan for buying home.
Next, the advantages and disadvantages of rental homes are given below:
Pros of Rental Homes
If the rent agreement does not have a lock-in-period then rental homes gives you the freedom and flexibility of leaving the house whenever you want. Even more, it is easy to terminate the rent agreement as compared to home loan. Higher levels of commitment for earnings are essential when it comes to pay back the home loan.
You may have to relocate constantly due to better career options and when you are staying in a rented house then it becomes easy to move to a new place. Furthermore, you don’t need to pay any additional costs for the maintenance, society charges of the home as it is paid by home owner usually.
Cons of Rental Homes
- You do not get the security of an asset when it comes to renting a home. You can’t raise funds by selling the asset when you need it. Thus, you only get the shelter by renting a home not the security.
- The rental cost increases every time and rent escalation can be the reason for inconvenience. If the increased cost disturbs your budget then you are left with the option of finding a new home and shifting there.
- The property taxes and home loan repayment amount are deductible from income tax. This ultimately decreases the home owning cost whereas the amount you pay for rent does not affect the tax. Thus, you can avail many benefits from a home loan.
- When you have your own house then you can tailor the space according to your taste. Conversely, a rental home can’t bring you that joy and when you need to do minor changes at your rental place, you have to take home owner’s prior permission.
Consider the above-mentioned points of buying or renting a home. If you have made up your mind to buy a home then get in touch with a trusted financing company. They can give you detailed information regarding the home loan process to make the dream of having your own house a reality.