First published: 5 November 2021 @ 6:00 pm
Living a good, comfortable life in a good house is a dream of many people. It is an aspiration of many families. But some people do not have a high income to let them buy a house. For them, renting a house is the best option. Paying rent each month, they can live in a good house and save money. For this purpose, they are willing to work hard to earn enough money for buying or renting house.
However, in some cases, the cost of renting a house can also be a big burden for their finances in contrast to the price of house ownership. So which one is better, buying a house or renting a house? In this article, we will talk about the benefits, advantages and disadvantages of buying a house and renting a house. In addition, we will also talk about the comparison between buying a house and renting a house.
Advantages of Buying a House:
1. Avoid housing shortage:
The housing shortage is a big problem in many countries. The government and the real estate industry do not pay enough attention to this problem. So it is better to buy a house than to rent one.
2. Easy home financing:
Home financing is easier than renting one. You can take out a mortgage to buy a house, or borrow money from the bank. It is not necessary to pay rent. You can get a home loan, pay the loan off, and use the house as a collateral.
3. Good long-term investment:
You can buy a house with a high return on investment. Many people choose to buy houses with high returns. The profit from buying a house is higher than that from renting.
You can buy a house after saving up for a few years, and make it yours forever. Then invest in it, rent it, or spend money on renovation costs and sell it at a higher price. You won’t have to pay rent any more.
Disadvantages of Buying a House:
1. Housing market:
There are more and more people who want to buy houses. There are also more and more people who want to sell houses. In this case, the price of a house will rise or fall in the market. You have to face housing shortages or housing surpluses.
2. Construction costs:
The cost of construction of a house is very high. It is much higher than the cost of renting a house if you are currently on a low income. In order to buy a house, you have to save a lot of money.
3. Property taxes:
In some cities, the property taxes are very high. For example, in Malaysia, the property tax is around 5% of the property value. If you buy a house, you have to pay the property tax. If you rent a house, you don’t have to pay the property tax.
Advantages of Renting a House:
1. No property tax:
For people who are renting a house, the only thing they need to pay is the rent. For example, if you are renting a house for MYR 2000 per month, you do not need to pay any property tax. So it is quite easy to calculate the value of the house.
2. No maintenance costs:
For people who are renting a house, they do not need to pay any maintenance fee. It is the responsibility of the landlord to maintain the house.
3. It is convenient:
For people who are renting a house, they can move in and out at any time. So they can live in the house when they need it and leave it when they want.
Disadvantages of Renting a House:
1. Expensive:
For people who are renting a house, they need to pay the monthly costs. So, if the rent is high, it will be difficult for them to save money.
2. No investment:
For people who are renting a house, they can not invest in the house. This is because they need to spend money on the monthly payment.
3. Less stability:
Stability is the main thing that makes people comfortable. For people who are renting a house, they will not be able to find the comfort of living in a permanent house.
Who Should Consider Renting?
Renting a house is a very suitable option for those who do not have enough money to buy a house. This is because paying a high price at once for a house may be too expensive for some people.
For this reason, it is more convenient to rent a house. Renting a house can also be suitable for those who are moving from one place to another. In this case, renting a house is the best option.
In addition, there are some kinds of people who are more suitable for renting a house. Those include:
1. Young, unmarried people who do not have a family to support.
2. People who need to move from one city to another regularly.
3. Students who do not have enough money to buy a house.
How to Determine if You Can Afford to Buy a House or Not?
The main problem in this case is that most people do not know how to calculate the actual cost of buying a house. It is important to consider many factors in this calculation.
First, you need to calculate the price of a house with a few years of rental payment. Second, you need to add up all the necessary expenses in the future when renting a house, such as maintenance and taxes. And finally, you need to consider the interest rate.
You will know if you can afford to buy a house if you can afford to buy a house with a few years of rental costs and adding up all the necessary expenses in the future when renting a house.
You need to have a good income and have a very low interest rate to be able to afford to buy a house. If you do not have enough money to buy a house, you can rent a house for a short period of time and pay the rental costs of the house, so that you can save enough money to buy a house.