When you start to live independently, it may feel like a fresh breeze of freedom at first. As time goes by, however, responsibilities come to you like a landlord knocking at your door. Choosing your own home is one of the major decisions you will make in your life as an adult. Not only does it have an effect on your lifestyle but on your financial health as well. You are probably asking yourself: “How can I actually choose a place to live in? Should I buy or just rent one?” Fortunately, we are here to help you in coming up with a sound decision.
The Reliability of Renting
There are a lot of people who believe that buying a home is more practical than renting one. However, it’s not always the ultimate solution. You must first consider the advantages and disadvantages of each one. Going through every detail may be overwhelming, but it will do wonders for you in the long run.
While real estate ownership offers opportunities in building equity and financial security, renting also has its essential benefits. Flexibility is one advantage of renting. It lets you choose from a wide range of locations, contract terms, and even types of space. When it comes to repairs and overall maintenance, you can have someone else do the work for you. Your monthly expenses are most likely predictable and it would be seamless for you to compute them beforehand.
In terms of payments, renting does not necessarily mean that you are throwing away money every single month. Having your own place to live is an investment after all. Therefore, make yourself accountable and learn to choose wisely.
Why Buying a Home May Not Be for You
At first glance, the benefits of buying a home may be attractive in terms of financial stability, being part of a community, and pride of ownership. However, when it comes to digital nomads, for example, buying a home may not be the best bet. Even though you may have savings that you have managed to set aside through the past years, owning a home is actually a much larger investment than you think. Simply put, the overall expenses of renting are relatively lower compared to the overall expenses of owning a home.
Here is a list of costs for owning a home that are not generally applicable to renting:
- Estate taxes or property taxes
- Maintenance and repair services
- Homeowners insurance
- Pest control
- Tree trimming
- Home renovation needs
- Mortgage interest
There may be more hidden expenses depending on where your acquired home is situated and how well it is maintained. If you don’t have enough time or the means to fix things around the house, then it’s time to reconsider renting. The last thing you would want to happen is run out of extra money for other bills and debts that are not related to homeownership. Another factor you have to consider is whether you are planning to stay in the location for a long period of time. Especially if you are in a romantic relationship, you might want to rethink and reassess your long-term plans with your partner.
Why Renting Can Be the Better Choice
Now that you are fully aware of the possibilities to consider when owning a home, let us discuss how renting can be a more feasible alternative for you.
- Security deposit instead of down payment
These two terminologies may sound like they are one and the same. In fact, when preparing your budget spreadsheet, you might be listing down a deposit as an equivalent of a down payment. Technically speaking, a security deposit in renting is quite different from a down payment when it comes to homeownership. When buying a home, you need to put up front a percentage of the total cost, which is relatively much higher compared to a security deposit. A deposit, on the other hand, serves as a protection for the owner of the rental property, which is usually priced at an affordable amount and easily refundable.
- Less financial burden
You won’t have to worry about shouldering additional bills such as maintenance, repair, and estate taxes. Your monthly rental fees are also fixed, depending on the contract and terms you have agreed upon with the property landlord. With this, it would be much more hassle-free for you to estimate or compute your overall expenses whenever the need arises. As for the insurance, the costs are relatively lower versus purchasing an entire house. Last but not the least, decreasing property value would not be a concern on your end. This leaves no impact on your personal net worth, which is calculated by deducting your total debts from the overall value of your assets.
- Accessibility meets convenience
Aside from having highly accessible amenities (depending on what the rental property offers), renting your own space provides you maximum convenience. Living near key establishments and transportation facilities lets you do more with less effort. Escaping the unnecessary traffic or daily commute allows you to spend your valuable time and hard-earned money elsewhere. Additionally, if you come to a point where you realize that the current location doesn’t fit your needs and lifestyle anymore, you can move to another neighborhood without the hassle.
Final Word
At this point, you may already have a better understanding of the difference between renting and buying your own home. Taking a closer look on the nature of real estate properties and processes can help you in weighing the pros and cons to come up with the best decision.
If you’re someone who will be moving out of your family’s house for the first time, then renting a home is a much more practical move. You can still have the personal freedom, flexibility, and accessibility you most certainly need.
Need a place to start? You are in the right place. Here at bedsandrooms.ph, we provide a wide variety of choices when it comes to rental spaces. With just a few clicks, you can already browse through thousands of properties and connect with the landlords. Ready to start your renting journey? Register now or learn more about renting through our rental guides.