When people go out looking for a house, they have two options; they can either rent a property or purchase it. When you buy a house, the property legally becomes yours, and you are its sole owner. However, when you rent a house, you can reside in it temporarily depending on the contract length; however, the property does not become yours. Buying a requires a large amount of money, while renting a property is cheaper.
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Renting a property
Many people these days prefer to rent homes instead of buying them due to the several advantages of renting a house. Renting a house is a smaller commitment, and hence it provides more flexibility. Life these days is exceptionally predictable, and people have to travel a lot due to work and other commitments. Buying a house would tie you down, whereas renting a property would give you more freedom.
Since the property is not yours and still belongs to the landlord, you can move out without worrying about the property. Due to the flexibility aspect of renting a house, most young people choose to rent over buying. Another benefit of renting a house is that it is less expensive. Buying a house requires a considerable sum of money that people do not have. People have to take up a loan or buy a house on a mortgage which is an added liability. Thus, renting a house is more affordable than buying one.
Furthermore, renting a house saves you from paying maintenance costs. As a tenant, you would not be responsible for maintaining the house and freeing yourself from the burden that comes along with a house. As a tenant, you will not have to pay property taxes or pay for utilities. Another plus point of renting a house is that it involves less paperwork. Purchasing a home is a complicated procedure & involves a lot of legalities.
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Compared to buying a house, renting one is more accessible and involves less paperwork. However, along with all the advantages, several disadvantages come along when you rent a house. The most significant disadvantage is that you still would not get ownership despite paying a considerable amount as rent every year. Owning a property gives an individual a sense of security, whereas living on rent keeps you dependent on other people.
Buying a property
Buying a property requires a more significant sum of money but has various benefits. As mentioned above, owning a house gives an individual a sense of security and stability. Lenders are also more willing to give people property money and tend to charge a lower interest rate. Moreover, the property’s value increases with time, so investing in a property today would allow you to profit from the increase in value. Owning a property opens the door to several opportunities. If you are not residing there, you can give the property up for rent and becomes a source for generating passive income.
As the property owner, you have the freedom to do whatever you want with the property. As a tenant, you do not have the right to carry out renovations, but as the owner, you can alter the house so that it is according to your tastes. However, just like renting a house, buying a property has several downsides. A house brings along several responsibilities. As the owner of the property, you will be responsible for all the maintenance costs and will have to give property taxes. In most cases, buyers purchase property on a mortgage, and thus a significant portion of their income goes into paying the interest on the mortgage. If your income falls in the future and you can no longer afford the mortgage installments, then the property will be taken away from you.
Both buying or renting a house comes along with several disadvantages and advantages. You need to figure out which option is best for you by considering your personal situation and financial standing. No matter which option you go with, it is imperative that you do all the relevant research. Read more about 1947 Housing.
Ramza Zahra is a Karachi-based freelance content writer who uses her life experiences and curious nature to research and pen it down and make a living. Currently, she is working with Sigma Properties as an Snr. Content Writer.