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What’s Affordable? Home Ownership Or Renting

Posted Saturday, January 29, 2011

The decision between buying a home and renting a house is not as simple as it may sound. There is more to the decision than whether it is financially possible. In most cases the payments on a home is actually cheaper than rent, but consider the other factors involved.

There is a big difference between home ownership and renting. Purchasing a home is a long-term obligation as opposed to the short-term commitment of renting. You need to decide if you want to spend years at the location where you plan to purchase a home. Consider the job market in the area, and how secure you are that employment will be available should you lose your current job.

Buying a home usually requires a large down payment where renting requires a deposit, generally equaling two months rent. Ownership requires a financial assessment and a mortgage with long-term responsibility. Renting is a short-term obligation of paying rent monthly, or for the term of a lease agreement. Renting makes it easy to pick up and move at will regardless of the reason. You may get bored with the home, or finances may force you to find a cheaper standard of living. If renting, you can find a less expensive rental, but if you default on a mortgage, you may conclude that I must sell my house .

Lifestyle plays a large role in ownership versus renting. Home ownership requires a pledge not only to make the mortgage payments, but also to do the maintenance required of every homeowner. It does not matter how nice the home is there will be maintenance, including upkeep of the yard as well as anything that breaks.

Liability is part of owning a home. If a tree limb breaks and damages your neighbor’s home, you are accountable. You are liable for any accidents or injuries taking place on your property. It is your responsibility to pay the taxes and insurance. If you feel a sense of pride, and enjoy decorating and making improvements, you will probably make a good homeowner.

However, if you prefer to call the property owner to fix any problems, and do not especially find it satisfying to change or improve the property, renting makes more sense. The major responsibilities when renting is the monthly rent and taking care of the rental property. Renting may be more restrictive when it comes to pets, children, and other regulations, but unlike a homeowner who thinks I have to sell my house , you are free to move at will.