The Pros and Cons of Buying vs. Renting Property

For beginners like you, buying a property might not always be a viable choice. If you have just started out, renting will provide you with an array of options and advantages, including a lower rent and ease of shifting. 

There are plenty of apps for you to make a decision. Before you make this significant choice, make yourself aware of the pros and cons of renting and buying. 

Buying a House

Pros

• Stable Payments: A fixed-rate mortgage has constant monthly payments that will not swing upwards with market fluctuations. You can plan exactly what you will pay a year from now without concern about how the market may change before your next lease.
• Tax Advantages: You might benefit from tax advantages when you buy or sell a home based on your financial situation at the time.
• Stability: Buying a house can provide stability to your family and the community you are nurturing. With the ability to pay your mortgage, you can stay at home and contribute to the community that nurtured it.
• Control Over Lifestyle and Family Decisions: It's a place where you are the boss and have the biggest say in your lifestyle and family decisions. Suppose your kids are in public school, and you don't want to risk having them change schools because your landlord doesn't renew your lease. Owning a home removes much of the risk of having to move.
• Flexibility over Living Space: Homeownership allows for personal customization over your living space, from interior design to landscaping.
• Community Involvement: Home ownership often coincides with voting, volunteering in schools, and general civic roots. If you are a homeowner, you are likely to put some roots down and get to know the people in your community.

Also Read: Legal Considerations in Property Management

Cons

Think about these cons associated with homeownership:

• Maintenance Costs: Homeownership means you pay for everything-all maintenance and repairs, both expensive and unpredictable. You are your own on-site property manager-whether it's a bursting pipe on a cold winter morning or a broken air conditioner.
• Tough to Refinance : If you want to move, you will need to sell your house and wait for a buyer to pay the right price before you cash out the equity from your home. Depending on the market, this will mean you wait much longer than you would wish to be able to move elsewhere.
• Property Taxes: Be prepared to pay several thousand dollars a year in property taxes. The municipality imposes property tax based on your home's assessed value, which you may dispute, but you must keep your property clear of tax liens.

Renting a Property

Pros

• Affordable Monthly Payments: Homeownership remains an unattainable dream for many in the. Lower incomes can be used more easily to finance home purchases. Low-cost markets, however, may not ensure property value appreciation in the long run.
• Protection From a Depreciating Asset1: Investing in real estate can be risky because property values can go down. Renting ensures that you won't be left dealing with an asset that has significantly depreciated in value. The risk belongs to the property owner.
• Easy of Shifting: If you're a professional person working in an industry that promotes or requires frequent changes of location, then renting may be the correct decision for you. It gives one a flexibility in event he or she wants to move with minimal financial burdens such as transaction costs of buying and selling a house like brokerage fees, closing costs and repairs. Also after tenancy, relocation is easy, making it beneficial, if for instance one has changed jobs or downsized his working life.
• Repairs Are Covered: You don't have to worry about paying for maintenance and repairs. It's typically your landlord's expense.
• No Property Taxes: You do not pay property taxes, but your landlord might pass it to you. If you find out that the landlord is passing on too much for your liking, you could always move out.

Cons

Consider these renting downsides:

• Rent Increases: Rental rates can change, which means your annual budget is always uncertain. Rapid increases in real estate values can result in higher rents.
• Doesn't Build Equity: Your monthly payments are building up your landlord's wealth, not yours.
• Can't Modify Property Without Owner's Consent: You cannot make significant modifications to the rental property without the owner's approval.
• No Tax Benefits: Neither does renting offer tax benefits in the form of mortgage interest deductions and property tax deductions available to homeowners.
• Must Be a Disciplined Investor: Homeownership forces you to build equity, but renting does not. So you ought to possess the personal discipline to save and invest money elsewhere.

Also Read: How to Choose the Right Property Management Company

Conclusion

Whether it's best for you to rent or buy depends on what specifically suits you. If you have a stable job and income and are more than comfortable staying in one place for several years, buying a home could be perfect. However, if you aren't ready to settle down and want the freedom to change residence at short notice, renting could be the better option.

Whatever be your choice, an effective property management service can make your property more attractive. ZEZTATE is a realtor and professional Property Management Services in Kochi, Kerala. Our real-estate services in Kerala focus on Property Management and Project Management Services, Deep Cleaning Services, Housekeeping, Building Maintenance and Property Caretaking Packages.

For more information and inquiries feel free to contact us now!