If you are quick to jump to the conclusion that it is always better to own than to rent a home, read on to find out why this is not always the case.
Renting is often frowned upon, and conventional logic screams that it is always better to own your home than it is to rent. After all, handing over money every month to a landlord is like throwing money away. At least this is what the proponents of home ownership have to say. But paying for rent is no more like tossing money in the garbage that is paying your food bill at the end of the month. In both instances, you spend money you’ll never see again, but in both instances, you have received a necessary good or service.
Although the decision to buy or to rent is ultimately up to an individual’s preference, the following are a few reasons why renting may actually be a better option than buying.
Retain the Freedom to Move at Will
Firstly, renters get to live a free lifestyle. They can simply pick up and move from place to place on a whim. This is not for everyone, but if your job requires you to be flexible about where you live or if you just like to know you can move at the drop of a hat, then renting may be more your style. If you move house a lot and live in the UK, I recommend Excalibur removals of Bristol.
You Don’t Have to Deal with Unfavorable Interest Rates
Buying a house means entering into a huge debt obligation. If you are not able to secure a favorable interest rate because of your current financial situation or because interest rate markets have simply skyrocketed, it may be better to put off buying until this changes. Paying exorbitant interest rate charges could increase the cost of home ownership to the point where it simply does not make sense to move forward.
Viewing a House as an Investment May Be Flawed Logic
There are many costs associated with home ownership that make it difficult to be classed as an investment or savings plan. Homeowners are typically comfortable paying mortgage installments every month because this is viewed as a contribution toward homeowner’s equity. This store of value, although real, may not be the best way to save because to access this money you would need to take an additional loan, albeit at a lower rate of interest. You may be better off putting your cash directly into a savings plan if you want to build your savings.
Renters Don’t Have to Worry About Maintenance
When you rent, there is no need to worry about leaky faucets, aging roof shingles or peeling paint. Homeowners, on the other hand, must have a fund ready to dip into to take care of these problems as they arise. Home maintenance can be expensive, so it is especially important not to buy more house than you really need because this is just an unnecessary cost to carry.
Home Prices Fluctuate, So Homeowners Are Exposed to Risk
Although the general trend is for home prices to rise over time, the housing market fluctuates like every other commodity. Home prices move up as well as down, and if you need to sell at a time when the market is soft, you may realize a loss on your investment.