When you are renting, assuming market equilibrium, you are the one ultimately paying off the mortgage, interest on it, taxes, fees and the cost of all repairs. But you will never own the equity on your home. The capital, including possible appreciation will never be yours. Also, home owners get to deduce some of their costs from their taxable income in many countries. Assuming market equilibrium, renting makes usually no financial sense unless you know you are going to have to move every few years. Also, when you buy a home, you won't have to deal with the owner who has the right to inspect the condition of their property from time to time or ask the owner's permission to modify your home or repair it.
But renting can be the more financially savvy choice when you know that you will not live in your home for very long. Renting is very flexible. You only need to leave your landlord notice and you will be free to move without any transaction costs like when buying a home which may include estate agent's fees, bank fees, or stamp taxes. There is much less financial risk, too. When you rent, you are immune to market fluctuations. Also, if there is a fault (one not of your making) in the building you live in, you won't suffer any financial losses as a tenant.
Buy or rent: the eternal question You are a tenant and you ask the question of home ownership. Rent or buy what is the best option? Some explanations to help you understand the ins and outs of the rental and those of the property. Simple concepts to help you choose between these two great choices of life.
Advantages and disadvantages of renting
It is first and foremost a flexible option that allows you to easily change your main residence, for example in the event of changes in your professional life or family expansion. A rather welcome flexibility in a complex economic environment. Financial side you do not support the property tax, you can, in some cases, benefit from the Personalized Assistance to Housing and major repairs are the responsibility of the owner.
You are first subject to a lease that may, under the conditions provided for by law, not be renewed. This can be problematic when you have reached a certain stability and want to stay in a neighborhood that you enjoy. Financially, your rents paid are a dry expense without wealth creation. In addition, rent may increase each year, according to the benchmark published by the Ministry of Housing. A rising addition year after year could end up weighing heavily. The small decorative work you do to customize your home will be lost. In addition, as a tenant you depend on the goodwill of your landlord for the conduct of maintenance or repairs that you deem necessary.
The advantages and disadvantages of buying
You are at home and you finally enjoy a real long-term stability. You do your work whenever and wherever you want. On the financial side, each monthly payment includes a share of forced savings which gradually constitutes a significant financial capital. In the same way, your apartment or house can increase in value and increase your wealth. A resale may give rise to a significant increase in value, which is not subject to special taxation when it concerns the principal residence. In France, most mortgages are fixed rate. Your monthly payment does not change. Also with the purchase, you build a heritage and you have a real long-term visibility.
Access to the property is a bit longer than a rental. You are then subject to the property tax and you pay all the possible expenses of co-ownership. The mortgage leases you long or very long terms (generally 15 to 30 years). Moving and reselling is also a much more complicated operation than putting an end to your home lease.
The balance sheet of the confrontation between rental and purchase
Both options have their advantages and disadvantages, but from a financial point of view the purchase is very important. It allows households who have become owners to build a heritage. This aspect is particularly true in the current period when the historically low level of rates makes it possible to borrow at low cost. It is not uncommon today that the homeownership is done by means of a monthly payment lower than a rent for an equivalent housing!
The purchase stands great winner of this confrontation with the rental. If it is a little longer and more complex to implement, it constitutes for households a form of forced saving in stone. A much safer sector than those related to stock exchanges!
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Let's compare the benefits and advantages of buying a house.
Buy a house
Rent a house
Conclusion: Renting a House or Apartment Is Not the Right Choice
Based on the comparison of the advantages and disadvantages between renting and buying a house or apartment above, we can see that choosing to rent a house or apartment is actually not the right choice.
At the beginning of your career when your income is still not qualified, maybe this choice is still considered reasonable. But you must also immediately decide when you will rent and when you start preparing to buy a house. Because in the end, even though it is small and simple, the house itself is a more appropriate choice than a big house but not our own.
Ref : nano.do/nap-prostitute-strongly
I suggest you to buy a house because you have an asset that its value will increase every year. The problem is you need a lot of money to buy a house.
If you rent a house, you have to think of money to rent every month or every year. Renting a house can be a solution for you if you don't have a lot of money to buy a house.
Owning a house