Pros & Cons of Renting Vs Owning a House
House Owning: Homeownership may be the method you should utilize to secure appropriate housing to meet your needs. Suppose you decide to buy and/or remodel an existing house. In that case, your choices include new houses (maybe modular, mobile, or componentized), older houses, cooperatives, and condominiums, including apartments and townhouses. Buying a home is not an easy and quick decision. This decision comprises a series of factors, some of which can be explained by pure economic theory and others more on the psychological and behavioral side of the homeowner/renter.
RENTING: You could consider renting to secure appropriate housing to meet your needs. There are various rental choices, including apartments, duplexes, townhouses, and individual houses. Renting a home may mean that you, the tenant, are responsible for routine maintenance of the yard and sidewalks and some interior maintenance. In addition, the tenant pays the utilities typically.
(RENTING VS. HOME OWNERSHIP, 2018)
Pros & Cons of Renting Vs Owning a House
Advantages of Owning a House (Pros):
• Economic:
- Safe form of investment (some asset return may be realized at the time of sale of the property).
- Strengthens credit rating (house serves as collateral).
- Income tax advantage (tax deductions for interest expenditure).
- Stabilized housing costs (you pay a set amount on a monthly mortgage).
- As referred by Sinai and Souleles (2005), “However, homeownership also provides a hedge against fluctuations in future rent payments,” this means that by owning a house, the owner is protected against movements in the future rent values if they would need to rent it.
- The owner can rent the house and generate revenue from that asset.
(Boshoff, 2015), (RENTING VS. HOME OWNERSHIP, 2018)
• Psychological and Social:
- Enjoyment, pride, security, satisfaction, and independence.
- Freedom to redecorate or remodel -allows the owner to make modifications to his taste and change everything he wants
- Privacy is more easily attained.
- Social freedom.
Disadvantages of Owning a House (Cons):
- Maintenance and repair responsibility.
- Property devaluation – changes in the community may cause property to decrease in value.
- Added expenses – property maintenance, fire, flood, tornado insurance, liability insurance, taxes, costs of credit, and other costs involved in making the purchase.
- A down payment is required to make a purchase.
Advantages of Renting (Pros):
• Economic:
- Lower monthly costs – no maintenance and utility charges are generally included in the rent at group rates.
- Controlled housing expenditures – you know precisely your expenses each month.
- Minimum financial risk – all you can lose is a deposit.
- Minimum responsibility – management generally handles maintenance needs.
- No down payments are required – however, a deposit against damage may be.
• Psychological and Social:
- Recreational facilities.
- Social activities.
- More flexibility – a renter is free to change housing by changes in income, family size, tastes, and interests.
Disadvantages of Renting (Cons):
- Apartments are not always available.
- No equity accumulated.
- Possible unstable housing costs.
- Pet and cleaning deposits are often required.
- Restrictions – pets and children may be restricted.
- Limit to improvements -the landlord may hesitate to repair and redecorate as the tenant desires. As a result, the Family cannot remodel to meet its needs.
(Zumbro, 2011), (RENTING VS. HOME OWNERSHIP, 2018), (McManamon, 2021)
The role of the title search in making a home purchase:
Before purchasing a home, you need a title search to ensure that you can legally own the property free and clear. A property title search examines public records on the property to confirm the property’s rightful legal owner. The title search should also reveal any claims or liens on the property that could affect your purchase.
What the title search involves would be an investigation of details of the title and the property, such as whether there are questions on the transfers of ownership from one owner to another, as well as the existence of lawsuits, liens, and legal claims that may have an impact of the property and its sale.
When a title search is ordered, a title search professional or a team will visit courthouses and the surveyor’s office to check the title’s details. Then, it will process the information. The title search underwriter may also contact your bank to help the bank formulate the terms of your new loan. Then, the title search underwriter will provide a report on all the information he has culled.
The home loan process also includes purchasing title insurance and a property survey. The purpose of the title search, the title insurance, and the property survey is to ensure that there are no problems with the property and that the bank’s investment or loan is secure and protected.
(What Is the Role of a Title Search in a Mortgage Process? 2020), (Dehan, 2021b)
Check the following reference articles to learn more about the Pros & Cons of Renting VS Owning a House.
- Boshoff, D. (2015, December 1). The Rent vs. Buy Decision of Residential Property. ResearchGate. (URL)
- Dehan, A. (2021a, November 20). Property Title Search: What It Is And How It Works. Rocket Mortgage. (URL)
- McManamon, P. (2021, December 2). Cities That Will Pay You to Move There. InCharge Debt Solutions. (URL)
- RENTING VS. HOME OWNERSHIP. (2018, December 10). GOOGLE SCHOLARS. (URL)
- What is the role of a title search in a mortgage process? (2020, October 31). InsuranceQnA.Com. (URL)
- Zumbro, T. (2011). EconStor: The relationship between homeownership and life satisfaction in Germany. The Relationship between Homeownership and Life Satisfaction in Germany. (URL)
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