Get Intrigue Information about Indo Scythian History at Mintage World-Mumbai-Art - Collectibles

Rent or buy a house: Which is better for you?

Are you dreaming of the day when you will have your own place? Is that day almost here? If you are getting ready to switch from rental to ownership – or if your son or daughter is – you may be wondering: is it more economical to rent or buy? It’s an interesting question, especially if you live in a place where rentals may be much lower than home prices.

Buying a house is often a deeply sentimental decision. Home ownership comes with pride and security. However it often does not make economic sense.

You need to look at more than the cost of rent or a mortgage payment to know for sure. There are a number of other factors to consider. Here’s a quick list of things to think about before you decide.

Why should I rent?

• You are not responsible for the maintenance.
• You simply call the property manager if something goes wrong. But you do have to change the light bulbs.
• Your total monthly costs may be lower.
• You won’t have any major maintenance costs to pay. But you should budget for small monthly costs, based on the size and type of place you are renting.
• The rental apartment may be nearer to your workplace, where it might be too costly to buy.

Take into account the cost of commuting to work. Often rental properties are more central for jobs, amenities and transit than homes in suburban communities and thus would save you money and time.

• You don’t have the same worries if you go on vacation. It’s not your property.
• You can move almost whenever you want.
• It gives you a chance to get a feel of the neighbourhood if you intend to buy nearby.

Why should I NOT want to rent?

• You are giving your money to your landlord. You will never see it again.
• You can miss a great opportunity in the housing market.
• If your rental costs are lower, you have to ask if you would save the difference. It is easy to simply spend it instead of saving and investing it.
• You may get a bad landlord. In some places, it can take days and even weeks to get important repairs done.
• You may have to pay a deposit up front for damages. You will also have to pay a rental deposit – usually equal to a month’s rent.
• You may have limits put on the way you decorate. For instance, you may not be allowed to paint the apartment. Or, if you do, you may have to return it to the original colour before you leave – or forfeit your damage deposit.

Remember: When interest rates are low, the costs of buying and renting can be fairly close. The comparison between renting and buying is often done on faulty assumptions. If you rent, you do not mind a small cramped apartment. You do not spend on furniture, plus you don’t have to pay stamp duty. If you buy, you want to buy something that at least takes care of your near future needs. But you will choose a specific location, which you will not be able to change as easy as you can when renting. So choose carefully.

A simple calculation of the cost of rental v/s the cost of buying a similar house will give you the answers. In market where realty prices are galloping out of control, renting might be a better option till the prices fall again.

Courtesy Yahoo.in