Renting vs Buying: Why You Should Rent instead of Buying a Home?

It’s home buying season isn't it? But for many people, the dream of owning a home will remain just a dream.

Popular reason for why people are choosing to rent rather than buy, is that buyers are concerned about home prices falling more, while others remain uncertain about the stability of the job they have. And for some, its a tighter credit for home loans, which is the main factor.

The goal of owning your own home remains a powerful objective. And affordability issues can be serious barrier to achieving this, and this is the reason renting is often seen as a ‘second best’ outcome. In the backdrop of the current market situation, renting could actually be the wise thing to do.

WHY YOU SHOULD PREFER RENTING?

There are several advantages to renting, such as the ability to save money and live in a neighbourhood you might not be able to buy.

• If you are in a job in which you have to relocate at every fixed time, then it is easier for you to renting a property as it will help you to move in easily, as shifting from owned house is very difficult and you can’t leave your property any how.

• Although it's better to rent if you won't be staying long or if your plans are uncertain, that kind of flexibility comes with a price.

• People on long term assignments (expats) working in foreign countries who are there for only a period of time, like 2-3 years, usually rent an accommodation as it is facilitated by the company and there is no use to buy a house just for 3-4 years max.

• Income is a big factor as you might be able to live in a better neighbourhood of a city by renting an accommodation there rather than buying an accommodation in a not-so-good neighbour if you had to buy the house.

• It gives you the luxury to move in, out or around as you like. You might move to another part of the city if you feel your office is far away or you might want to move to a quieter area, etc. Once you buy a house, you're almost stuck to the place unless you rent it out and then rent your own house, which is kind of pointless if you're within the same city.

• Renting means there are fewer ongoing costs to worry about – water utilities bill, home insurance, general maintenance, and repairs are covered by your landlord! In short, life is simpler when you rent, which can be great for young people who have just moved out of home for the first time.

Real estate is a good asset class to own and can act as a hedge against inflation. However, you should not buy a house simply because it is good to have real estate in your investment portfolio. A careful analysis of the underlying personal factors as well as the potential of the investment should determine if you should buy a house or continue to stay on rent.

This guest post has been written by Gunjan Johar, Real Estate Blogger.