Paying a Mortgage versus paying Rent.
(ThySistas.com) Which is better: buying or renting a house? The question is debatable. There are valid arguments on both sides, making it confusing for most people. However, as you may know, recent tax law changes show that it is not as advantageous to own a house as first perceived. While experts argue on the issue, let us look at some of the pros and cons of both.
Mortgage or rent; which works best for you?
- Look at the big picture. How long will be living in the same locality?
- It can be argued that the value of a house increases with time. But this is not always so. If you are considering buying a house, think of it as a place you will be residing in and not as an investment.
- If you look at all the expenses you are incurring when buying a home, you will find that rent works out cheaper for most people, especially people looking to get a mortgage in Guelph.
A look at the advantages of renting a property
Some say paying rent is a waste of good money. It is true that the money you spend on rent is never coming back, but its fair because in exchange you get a place to live where you can move out at any itme. The same is true for buying a home. You will end up spending oodles of money on taxes, transaction fees and interest payments. You are not going to get back any of that money either. Owning a house is not all its cut out to be.
Now, the disadvantages of renting a property
- There is lack of freedom to renovate the property. The tenant has to abide by the rules of the lease agreement.
- Without the approval of the landlord, no changes can be made in the rented area.
- A rental agent often acts as the link between the landlord and you. As there is a third party involved, matters can take a lot longer to settle.
- There are no returns when you rent.
Advantages of owning a property
- As soon as your mortgage is paid off, you can take comfort from the fact that the house belongs to you.
- You can use the equity to help you upgrade to a bigger home or save for retirement in case your house increases in value.
- You don’t need permission to make changes in your home.
- In certain cases, it is cheaper to purchase a home than pay rent.
Disadvantages of buying a home
- There is an enormous financial burden due to mortgage payments and home maintenance.
- Many additional costs too have to be considered. These are; taxes, insurance and maintenance.
- When you resale your house, you run the risk of not making a profit. Many factors; such as high interest rates or recession play a role in this.
There really is no concrete argument favouring one over the other. If at all you are thinking of buying a property, it is best to consider future prospects of the area to find out whether the house will reap rich dividends in future.
Staff Writer; Sherry Brown