Benefits and drawbacks of buying and renting - By: Frank Jeffries

When desiring to own a house, most individuals are having a hard time in opting whether to buy or lease a house. Due to the general understanding that getting an abode is beneficial unlike when leasing one, majority of people get on the boat, all excited and expectant. But, not all of their predictions become real. There are times when renting becomes the better choice and the dream of buying a home becomes a terrible dream. In order to prevent this, the best thing to do is to check the following positive aspects and negative aspects of both activities.

Renting
Leasing may be advantageous especially to young professionals who are still in doubt about their place on earth. Rather than buying an abode, that will need to be left vacant some years after, leasing is the better option. Renting is also beneficial to individuals with hectic schedules. There is a smaller amount of effort and time necessary to preserve the leased home. For individuals who wants to to stick to a specific monthly finances, leasing is also the solution. It has a permanent cost monthly until the agreed lease term expires. Furthermore, renting will require a smaller price of up-front payment, which is commonly two to 3 times of the monthly rates. Ergo, renting may be better than buying. However, this is not the case all the time.

Individuals often view leasing as a very disadvantageous process. Some even see it as a waste of cash. This reputation may be due to the number of drawbacks it has. For instance, it doesn’t permit for the tenants to acquire equity no matter how high the value of the home reaches. It also does not permit renovation and personalization of the asset. This hindrance asks for the lessee to adapt to the house instead of the vice versa. Furthermore, renting does not entail tax advantage for the tenants. The only ones to reap benefits are the lessors. Therefore, people become more attracted to purchasing a home rather than rent one.

Buying
There are also two sides to purchasing a home, though typically individuals view it as merely beneficial. This common conviction may be real first because years later, the mortgage balance diminishes and the home’s equity increases. Therefore, at a certain period, the need to pay will expire and all rights to the asset will be passed over. Secondly, owning an asset is better as it allows the owner to remodel according to what is required or preferred. Lastly, purchasing a home is beneficial as owning a home provide tax advantages. Ergo, a number of individuals are drawn to purchasing their own house. However, it is good to be knowledgeable of the counterparts of these advantages before actually buying.

The same with renting, there are some negative aspects in getting a home. First and foremost, the regular costs change. For people who wish to stick to a certain monthly budget, buying may not be sensible. A second drawback is the equity of the home may either increase, decrease or stay stagnant. There is no guarantee. A third disadvantage is that when there is a need to transfer, the house must be sold and this commonly consumes effort and time. Finally, purchasing a home can be disadvantageous as upfront payment is larger as compared to leasing. There is thus a bigger threat entailing the process.

About the Author

an expert in Manila Real Estate. The writer is also a professional in Makati Rent Apartment. also a practitioner in the overseas investment asset market, specializing in property and real estate through manilaestates.com; a website that deals with big property investment markets in the Philippines

Article Directory Source: http://www.articlerich.com/profile/Frank-Jeffries/73143

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