The renting vs buying debate continues to riddle the world of real estate to this day. While there are some who constantly rage on how it is not worth putting all your life savings down on one piece of property, there are others who feel that renting a home is just throwing your money away. Till date the question persists; is it better to buy or rent?
Home ownership has been considered as one of the main paths to growing one's wealth. Traditionally, owning your own home has always been considered as the ultimate achievement in a person's lifetime.
However, for first-time homebuyers, there are several factors that impact the decision of going from tenant to homeowner; one of them being taking that leap and getting into a long-term financial commitment.
To help you understand a bit better, let's look at the pros and cons of buying vs renting:
Renting
Pros:
Renting offers flexibility. Tenants can choose to move out as per their convenience.
No maintenance costs as it falls under landlord’s responsibilities.
No additional costs for repairs.
Renting is the best option for those who have a travelling job.
Cons:
Landlords can increase rent any time.
No equity. The rented apartment will never become an asset.
Rentals cannot be modified or changed without landlord approval.
Most rentals have ‘No Pets’ policy. Finding a place that allows pets is usually difficult.
Fear of eviction as landlords can decide to sell the property any time.
Tenants are bound by the rules mentioned in the lease agreement.
Buying
Pros:
Home ownership gives a sense of stability.
Home owners have the freedom to make any modifications/renovations to the property.
Buying a house is an investment. Owners can lease it to earn monthly rental income.
Home ownership builds equity.
Home ownership allows privacy and the freedom to have pets.
Cons:
Home ownership comes with maintenance costs and additional responsibilities such as repair costs/renovation costHome ownership comes with maintenance costs and additional responsibilities such as repair costs/renovation costs.
Properties are illiquid assets. Resale of a property is a time-consuming process.
There are also chances of a property losing value over time.
Home ownership means less mobility. Moving houses takes time as the property needs to be sold.
Home ownership could be more expensive than a rental apartment.
Monthly expenses in managing/maintaining a home may vary.
As you can see that there are both pros and cons to buying or renting a home. It all comes down to your individual preference as well as your financial capacity.
To help make this decision easier, letWizard.com has designed its very own AI-powered Genie tool. With its Rent vs Buy Calculator, users can now definitively find out whether it is actually better to rent or buy a property.
How does the rent vs buy calculator work?
letWizard.com’s rent vs buy calculator has been developed with the purpose of giving you a comparative analysis of buying and renting. All you need to do is enter your rental details, the purchase price of the property you’re looking to buy, as well as other information such as your annual rental increase, Agency commission, and security deposit along with your down payment, loan amount, interest rate, investment period and other details. By factoring all of these details, the calculator will help you assess the cost of renting vs the cost of buying.
Once you’ve got the estimates, you can also get in touch with letWizard’s valuation experts to further understand why buying actually is cheaper and makes more sense in the long run
