Personal Finance

Renting or buying a home – a big decision for most people

Personal finances are most important in one’s life, safety, and wealth. It is advisable to face it, learn and practice personal budgeting. If you can create your own financial destiny, then your life will be so much better. It is not at all a hard task and you can easily do it yourself. This guide will help to create a rhythm in your financial situation. The first thing you have to do is to know where you are financially at this moment in time. The next step is to make an estimate of what will be your financial situation after a short term perspective. After this set long term financial goals and make a plan to achieve them and then execute your plan.

It is a big decision for many people whether to rent or buy a home. There are lots of people who cannot make a decision on renting or buying a home. This comprehensive guide will help to make a decision on this big deal – renting or buying a home.

There are many people who don’t buy a home worrying about the pitfalls of home ownership or the hassle involved in the whole deal. But according to experts it is always better to own your home in the long run.

Let us discuss some of the advantages and disadvantages of buying a home.

The major advantage of buying a home instead of renting is that owning a home will gradually built your equity in the house. You can pay off your mortgage with the same amount you are paying to the landlord. And this eventually completes the loan period and you can own the house. The value of the houses generally tends to increases every year. Hence before taking any decision first decide how much time you are going to live in the place – if you decide to stay there for two or more year, then it is a better idea to buy your house. Another advantage is that you get to deduct the interest payments which you usually make on your taxes. This is a noted advantage – rent is not tax deductible. Hence owning a home can save a lot of money depending on your tax bracket.

We can also check the hassles when buying a home. When you own a home you have to spent money from your hand for any maintenance or improvements. If you decide to relocate to some other place it may take time as you have to wait fir a sale of the present home.

Now let us see the advantages and disadvantages of renting a home.

Renting will be a good idea according to which part of the country you live in. The major advantage is that your monthly rent will be less than an equivalent mortgage. If you are renting a home then you don’t have to bother about the maintenance and improvements of the property as the responsibility lies in the hands of the landlord.

Renting a house also has many disadvantages. For example, if you rent a home for two years at a monthly rent of $1,000, you have to pay a total of $24,000 in rent. It is a pure expenditure. If you have taken a mortgage you can pay off your mortgage with the same amount you are paying to the landlord.

In short, whether you are renting, or buying a home there are advantages and disadvantages for both. If you wish to stay a particular place for a long time then buying a home will be better. But if you decide to stay for a shorter period of time then renting will be a good option.