Renting vs. Owning a Home: When Does It Make Sense?
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Loading... - Aailyah Ally
- 03 Apr 2023
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For many, the dream of owning a home is one of the most significant life goals. However, in some situations, renting may be a better option.
Before committing to either, it is crucial to consider one’s financial health, personal life goals, and long-term plans. Let’s explore when it makes sense to rent instead of owning a home and the obsession with land purchase.
The Craze for Home Ownership and Land Purchase
The idea of owning a home and investing in land is prevalent. A home is a basic need, and people have strong feelings about it, both negative and positive.
However, when it comes to the size of the home relative to one’s financial health, there may be a disconnect. Many people make poor choices about homeownership, leading to regret and misery.
For example, retirees in rural areas may build incomplete homes, pursuing youth-era dreams, only to find that the money has run out.
Timing and financial implications are critical considerations that require thorough consultation with professionals before deciding to buy or build a home.
Future Investment
Buying a home is a significant investment, and the decision must be informed by consultation with experts in the property field. Regardless of whether one chooses to buy a ready-made house or build a custom one, financial consequences must be understood before embarking on the journey.
In the case of renting vs. buying, one can compare the monthly rent paid to the interest component of a mortgage. If the rent is equal to the interest one would pay each month, it may be worth considering a mortgage.
Although the mortgage payment may be slightly higher than rent, the additional payment is capital that goes towards acquiring the house, and this capital component of the instalment increases over time. Read More…
