Buying a property vs Renting a property.

There comes a point in all our lives when we start to contemplate about buying a property.  Although it is established that investing in a property is beneficial in the long run, the choice between renting and buying usually comes down to determining what is right for you, and what you can afford at the moment.  

You need to consider numerous factors before making your decision and that is what we are going to discuss here. Both options have their own pros and cons. Let’s examine two major factors that you need to look into before we start comparing them.

Budget

The first thing that you need to take into consideration is how much either of them is going to cost you. Buying a property is feasible only if you are ready to spend a huge sum of your budget on it. Calculating and setting up your budget is the most crucial aspect when it comes to acquiring property. You’ll have to undergo a lot of legal processes with their own expenses that you’ll need to take care of before you can become the owner. It also requires constant maintenance and repairments.

Goals

You need to identify your goals which will form a clear idea about what your circumstances are going to be like in the future.

If your work requires you to move around a lot or you have no plans of settling down in a particular place then renting is going to work out for you.

But if you are considering staying in a particular place for a long time or if you need a place that you can always come back to when things don’t work out then buying a property is much more sensible.          

Which is better?

So now you might be wondering “which is it? Buying a house or renting it?”

Now that we have established the two major factors that you need to look into, let us compare them and see which one comes up as a better investment strategy.

As mentioned earlier, buying a property will always be beneficial in the long run. There are too many risks & uncertainties that come with renting a property. Renting a property can result in unplanned investment, restrictions, regulations, and instability.

If you have a family then you certainly wouldn’t want to move into a rented house since your landlord can force you out at any time. Or inflation may cause a rise in the cost of living resulting in an increase in your rent. You won’t be allowed to renovate and decorate your house because of certain contractual obligations prohibiting you from doing so. The government does not provide any financial incentives for the tenants, hence reducing the scope for growth.

It is obvious that purchasing a property is going to be much more profitable than renting it.  This is because buying property is the most popular way of building your wealth.

Property is a tangible investment that can result in long term returns as its value increases over time. You’ll be in charge of managing all the important investment decisions such as coming up with ways that will increase its value, managing renovations etc. This will cause an increase in its equity thus providing you with a greater value than the amount you invested in it.

Now we know that buying property fares better in comparison to renting it you should always try to go for purchasing it considering your situation because even though renting a property has its own merits, they are easily outweighed by all the benefits comes with owning a property.