Sample Compare and Contrast Essay: Buying Property versus Renting Property
There are myriad of advantages and disadvantages that confuse end users when it comes to making a choice between buying property. Buying a home happens to be a very important financial decision which each and every one of us will have to make at some point in our lives. Some may argue that it is advisable to rent for a while before making a decision to buy while other end users prefer buying from the get go since it is cheaper in the long run; this is different from renting which appears cheap in the short run but is more expensive in the long run. It is ultimately better to buy property as opposed to renting; even though a bit challenging, buying is very much worth it.
The moment an individual pays off his or her mortgage, the home will be his or hers, and there will be no further need to get pensive regarding making payments on where to live. Renting, however, has the stress that is predisposed to owners at the end of every month. A failure to pay rent may lead to eviction in case the landlord, and the tenant cannot reach an agreement (Forrest & Hirayama, 2014).
For the case of a bought home, the respective owner can use the market value minus the mortgage debt to assist him or her to buy a much bigger home. What’s more, the equity of the house (market value minus mortgage debt) to help fund a retirement plan that is comfortable and favorable. On the flip side, renting has no such options for a tenant because the landlord is the ultimate decision maker.
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Renting vs buying property
Any home owner can spend money improving a home and raise its market value without having to seek permission from a landlord; but in the event that a house is rented, it is very challenging to do things out of one’s own volition. For instances, most apartment rentals within the states require that water color silk is used as opposed to oil based paints. With such a disposition it is very hard to customize interiors within a rental.
In some instances, it can even be cheaper to buy property as opposed to renting. All over the world, some rentals are characterized by very high prices and making payments back to back for three months would make one experience liquidity challenges. With such a consideration, buying becomes the only feasible option, which a time are very challenging to many individuals considering the increasing cost of living associating with low income.
Owning a home has its potential downsides too; first and foremost, it is a very big commitment (Andersson & Turner, 2014). It is advisable for potential buyers to be very sure that they can financially handle whatever financial venture that they are taking on. Before one is stable financially, it is not advisable that he or she buys a home. For instance, individuals that have bought a piece of property just to “keep up with the Joneses” have often found themselves in a fix the moment eviction comes forth.
Rent or buy property
Being the owner of a home is a bit of a challenge sometimes especially when the value of the property in question falls. In the event that this happens, the property owner may be unable to sell if they owe more to the lender of the mortgage than the property is worth. On the other hand, renting property has no such problems because, in the event that the said property depreciates, the tenant can move to another place.
For a property owner, repayments go upward whenever the interest rates rise, and it is paramount that this happens when the owner is ready. In the event that interest rates rise when the owner is not ready, there is a possibility of a financial strain. With renting property, the case is different when it comes to raises. For instance, if a property owner increases the rent, the tenant has a lot of options that revolve around moving to another place.
For renters of property, all the maintenance costs are directed to the property owner; the responsibility of the tenant is only to exist in the property. The case is however very different when it comes to owners of property. If it is a house, it is wise that the owner makes considerations of how to afford maintenance costs such as fixing a leaky roof or a broken boiler.
Buy or rent property
Buying property stretches the budget of immediate owners a great deal; if buyers do not watch out their decision may affect their capability to eat out, be entertained, and even go on holiday. On the other hand paying rent every month is a more spaced affair as opposed to buying which is most preferred as a one-off process.
Property owners have limited flexibility as buyers as opposed to renters. For instance, selling a piece of property and moving to another location is much costly because the owner may be expected to pay up for legal fees and estate agency (Easthope, 2014). For typical renters, all they need to do when they want to move is simply inform the owner and possibly demand for the deposit they paid upon entry.
When a property owner is living with another person, and they make a decision to split up, making a decision on what to do with the property in question becomes very difficult and expensive. Disagreements may ensue, and legal battles may come about. On the other hand, renting involves roommates who can move out to other locations whenever they find themselves in a quarrel, disagreement, or even within an agreement to go separate ways.
It is worth mentioning that owners of property do not always have an easy time whenever they want to sell. This is all very dependent on what is transpiring in the market. A property owner may be stuck with a property in the event that devaluation takes place and selling would be of bad taste. Different from owning property, renting has a lot of flexibility since the tenant can move to any location or property that he or she deems appropriate to desired needs and wants.
Summary and Recommendation
Despite the clear-cut differences between renting and buying property, the final decision boils down to the owner or the tenant. There is more security that comes with buying property as opposed to renting. Ultimately renting is more expensive in the long run while buying is cheaper in the long run. Conclusively, buying property is better in comparison with renting property since once property is bought, there will be no hassle to keep on looking for rent every end month.
Andersson, R., & Turner, L. M. (2014). Segregation, gentrification, and residualisation: from public housing to market-driven housing allocation in inner city Stockholm. International Journal of Housing Policy, 14(1), 3-29.
Easthope, H. (2014). Making a rental property home. Housing Studies, 29(5), 579-596.
Forrest, R., & Hirayama, Y. (2014). The financialisation of the social project: Embedded liberalism, neoliberalism and home ownership. Urban Studies, 0042098014528394.