Renting a house may seem to be a cheaper method of residing, but have you wondered whether it is profitable in the long run? Maybe buying a house seems like a much bigger financial commitment than the monthly rent, but which suits you better? In this article we will talk about the benefits of buying a house as opposed to renting one.
Capital Appreciation
The simple fact is that with time the value of real estate increases. A simple explanation is that the cost of land does not reduce. As free land keeps on reducing with the increase in population, the land available for construction is reducing at a rapid rate. With this trend, land is becoming an important investment and will soon become more expensive as the days go by. So selling a piece
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There are various economical and political reasons, which play a role in the rise of inflation but it all comes down to the decrease of money's purchasing power. It means that tomorrow you will have to pay more money than how much you pay for an item now. Therefore, rent keeps on increasing with the passage of time, as the value of real estate keeps on increasing.
Interest Payments and
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However, a small part of the amount even goes towards the principal amount. This increases the equity that you have. The more payments you make, the quicker your equity begins to grow. You can see that halfway through the repayment of the interest, the amount for the principal begins to increase and you are closer towards completely owning the home.
Financial Gains
Financial gains, or capital gains, are quite related to capital appreciation but they are not the same. Capital gains include the increase in the value of money. This is in many ways a cause of inflation. If you bought a property now, then the price of same property will be much more after thirty years when you plan to sell it. However, due to inflation over the thirty years, the amount that you spend now would be worth more in future. This also provides you with profit at the time of selling.
Privacy
When you are living in a rented home, there are many rules and regulations that have to be followed according to the landlord. An agreement is many times signed which limits your privacy. The landlord can any time come to inspect the premises or may not allow you to keep pets. If you want to live life according to your rules, then purchasing your own home will allow you to do
Some people might think that renting and owning are pretty similar, but they do have a lot of differences that people tend not to think about. In fact most people don’t do a lot of research on the differences and similarities. Renting a place to live is a wiser choice and is cheaper in the long run, but having a place that you own has a lot of advantages to. Some differences that people don’t think about are maintenance, utilities, and restrictions.
Apartments are a better choice than houses because they don’t require as much work and commitment. It truly does depend on your preference. If you have a larger family, an apartment may not be the best choice. People sometimes spend months making the choice for their living situation because you don’t want to be unhappy since you may live there for over two years. The process can be dreading and tiring but in the end it will be worth it.
are afraid to build any new buildings if in a few years those too will be taken
When you own your home, you have the luxury of not answering to a landlord, and the ability of decorating the inside and surrounding property as pleasing to you. But as a renter you have the flexibility to move when desired instead of staying stationary in a purchased home.
Inflation is the sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. (Investopedia) During periods of inflation, the prices of products and services will rise. There are several reasons why an economy would see a rise in inflation. Decrease in supplies, corporate deciding to charge more, and consumer confidence are some of the reasons why an economy would see the inflation rate increase. Consumer confidence is when consumers gain more confidence in spending due to a low unemployment rate and wages being stable. Decrease in supplies is when consumers are willing to pay more for a product or service is that is slowly becoming unavailable due to a decrease in supplies. Corporate decisions are when the corporations basically decide
Supply is also affected by the growth of a community over time. For example, a new city with 10,000 homes, expanding rapidly, will have low supply and therefore more expensive homes. An older city, however, with 50,000 homes and fewer and fewer new residents, will see
Buying a home can be an exciting experience for anyone. However, in some cases you just might be better off continuing to rent your home. There are many advantages to buying a home. However, it is not for everyone and buying varies from individual to individual. Currently more people are leaning towards renting but this could change in the near future.
Housing demand includes household growth, real incomes, real wealth, tax concessions to both owner-occupied and rental housing, concessions to first homebuyers, returns on alternative investments, cost and availability of finance for housing and the institutional structure affecting housing finance provision (Yates, 2008). The growth in the number of households and in real income results in the increased pressure on housing demand.
Renting is typically less expensive overall than owning a home. First, it does not require a substantial down payment, though it often requires a security deposit equal to 1-3 month's rent. Also, renters are not responsible for property taxes and repairs on the home, as homeowners are. Monthly rent is often cheaper than monthly mortgage payment, depending on the home and the property being rented.
Some individuals may believe that buying a home is part of the American dream and that renting an apartment does not compare, yet satisfied renters would disagree. Even though owning a home provides a sense of security while allowing modifications without permission, renting is preferred more often over buying because the expense of updating, monthly payments combined with utilities, and paying insurance on a home comes with a high price tag. A homeowner does have several luxuries such as forming lasting friendships with their neighbors, making landscaping changes to their yard, painting and designing their home. While that remains true, renting an apartment comes with several different options and
Maybe to them it will be simply easier than to pay off what might be required to pay for the house. Or maybe the dreaded mortgage of which we've all heard of will come to wreak havoc on our day. Maybe they do not want to deal with the little things that come with a house. Like a lawn or a yard that must be continuously maintained. Or the everyday simple problems that can arise in the household that otherwise the landlord would fix. But no matter the pros and cons of the ownership of a
Attention Getter: Should I buy a home or just keep renting? This is the most important question prospective home owners consider before buying a house because owning a home isn’t for everyone.
Buying a house provides stability forever unless the owner decides to sell or to move into another home in which the owner gains equity for selling. This is still a huge benefit. Owning a home is a very huge security measure. When a person is an actual homeowner and not a renter he or she can control who actually enters his or her home (Map, 2011). It is easier to purchase home alarm systems and everything that goes on in a person’s home is controlled by the owner. As a homeowner the option of what is allowed and what goes on is controlled by the actual homeowner. If an issue comes up and the owner has to move somewhere else then this is a huge benefit. As a seller a person can earn so much money and it can build equity (Media, 2010). Usually homes sell for way more than the purchase prices, especially if the owner has customized the home, in which was discussed earlier (RP Reality, 2011). The selling price could be a huge benefit to any owner who is selling their home and moving. These benefits cannot be earned by an apartment renter.
When dealing with interest rates and inflation the standard equation that is used is Fisher equation. What the fisher equation explains is that the real interest rate and expected inflation equals to the nominal interest rate (it = rt + Etπt+1) This means that a rise in expected inflation causes lenders to raise their nominal interest rates as there would be a decrease in the value of their loans due to purchasing power of repayments being lower and this causes the decline in investment as borrowing costs rise.
“Buying a house is a better option than renting an apartment.” In this essay I will discuss about the major benefits of buying a house rather than renting an apartments. While it can be costly it is a safer place to live that has long term-investment and tax advantage. Buying a house may be difficult and it can be a confusing process, even for veteran buyers. Here are some tasks that housing experts say before getting into the buying a house. Get financials in order. Buyers should check their credit score, taxes, 401(k) s and other aspects of their financial situation to determine the maximum amount they are comfortable affording for their monthly mortgage, utilities, maintenance, taxes and insurance. If one’s credit score is low, he or