When we set our future goals, almost all of us have a vision of a house. But as we grow older, we come to realize that it’s not as easy as it seems. You should always consider your financial condition and future goals, whether you’re planning short-term or long-term, and of course, your convenience before making a choice.
Many people encounter difficulties after they’ve made their big decision. If you don’t want to make the wrong decision, here’s a list of pros and cons to help you make the right one.
Pros and cons of buying a house:
Here are some of the factors you should keep in mind before choosing the best option for yourself.
Pros:
- Having your own house provides a sense of security. You can live without the worry of getting kicked out.
- Owning a house can help build equity. People call investing in a house “a forced savings account.”
- You can hire tenants and enjoy your monthly rent.
- You can make adjustments to your house however you want. It’s your property.
- The mortgage payments are usually fixed. It makes it easier to keep check of your monthly expenditure.
Cons:
- Your house is your responsibility, and so is its maintenance. It can cost you loads of money.
- Buying a house can benefit you long-term, but it’s not for you if you’re a person who likes to travel. It’s illogical to spend that much money on a temporary abode.
- The value of your house might decrease due to economic stagnation. That’s why it’s important to choose the best location when buying a house.
- You also have to give property tax, which is a percentage of the annual rental value of the property.
- If you don’t pay your property tax, then the government will have to put a tax lien on your property.
Pros and cons of renting a house:
Here’s a list of advantages and disadvantages of renting a property:
Pros:
- If you’re looking for a temporary home, renting is the best option for you. You can move in and out whenever you want.
- Renting a house is cheap compared to buying. Instead of taking big loans, you can just live on rent.
- You don’t have to maintain or repair the house. That’s the landlord’s job.
- You don’t have to pay property tax.
- You don’t have to pay that big amount of down payment that is given before making a big investment, such as in a house or car, etc.
Cons:
- The rent of the house increases annually as per inflation in the market.
- You can’t make changes in the house to your liking, as it is not your property.
- You can’t build equity, but you do help increase the homeowner’s equity.
- You have to pay your mortgage, as well as the rent, separately, while the owner can deduct it from the monthly rent.
- If the landlord fails to give property tax, the tenant must fulfill it.
