When it comes to finding long-term accommodation, we look at what makes better sense – living in a rented house or buying a property. Owning a home could also generate additional income, in the form of rentals or from paying guests.
A homeowner can mortgage the property, but a tenant cannot mortgage rental property. A tenant may have to shift out of a rented home anytime, at the request of the owner.
Homeownership brings intangible benefits such as a sense of stability, no fear of increasing rentals, privacy, and pride of ownership.
Here are a few key differences between the two options:
Buying a house can build equity
Homebuyers can capitalize on the investment in their home that gets accumulated over time. That means if the home’s value goes up, you’ll cash in on the higher value when you sell. Plus, with a fixed mortgage rate, you won’t have to worry about rising rents.
Another factor for buyers to consider is whether you will be able to deduct the mortgage interest from your tax liability.
As tax laws allow you tax benefit on mortgage interest payments.
Home maintenance costs
Homes need repairs and maintenance over time, and when you’re renting, those costs are generally the landlord’s responsibility.
For instance, in a rented apartment if there is any breakage, the landlord has to fix it. On the other hand, as a homeowner, you’ll be on the hook for those repairs and ongoing seasonal maintenance.
If you’re moving to an unfamiliar city or have an unstable job situation, staying on rent would be a better option.
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