Thursday, May 22, 2014
When it comes to living arrangements, there are two general options to choose from: owning a home and renting. Both have their own sets of pros and cons. It all depends on your lifestyle and living preferences.
Renting a house or condo will involve several drawbacks compared to owning a home.
1. Renters miss out on homeownership
Buying and renting a house or condo both involve making monthly payments—the former for mortgage loan payments and the latter for rental fees. However, when buying a home, the amount you pay every month is a step towards owning the property. After you’ve settled your mortgage loan, you can rest assured knowing that you don’t owe on the property anymore.
You also have the benefit of enjoying any appreciation or growth in the value of the property. After several years of substantial growth, you could sell the property at a higher price and gain profits from the sale.
Renters will miss out on these opportunities of homeownership and added value.
2. Security deposits
Landlords typically charge renters security deposits. This security deposit is the landlord’s protection for unforeseen damages that may befall the property. As a renter, no matter how well you take care of the property, unexpected damage may still occur.
While security deposits can be refunded once you move out of the property, there is no assurance that you won’t lose some or all of it. This amount is another trade-off you face as a renter.
3. Decorating and renovating
When renting a house or condo over the long term, you may want to redecorate or renovate the space to make it more livable or reflect your personality. Landlords may, however, have rules and restrictions regarding which parts of the condo you can change. This limited freedom on decorating options is a trade-off in itself.
Aside from that, any improvements you make to the property will be left to the landlord once you move out. Renters often miss out on the value-adding improvements and renovations as compared to homeowners.