Education. Employment. Home. Marriage, and family. This used to be the standard set of aspirations for the average Indian. But while Generation X embodied these aspirations, millennials have other plans. With the growth of digital nomads and flexible workspaces, the goals of millennials are definitely different from the pattern set by their parents. And many times it does not include owning a home.
For many, owning a home today is a liability. It’s limiting for their lifestyles, and it’s also a huge expense while renting is much easier and cheaper. For others, owning a home continues to provide security and comfort and is still signifies a certain status.
In this post, we compare the pros and cons of owning a house against renting a house and why each option is suitable or unsuitable.
Flexibility comes at a cost
Owning a home allows personalisation. It allows for those little touches that make a house your home. Put up that wallpaper or stick those decals to your heart’s content. It’s delicious freedom that is irresistible to some. But it also comes at a cost. Sure, the mortgage payment might be lower than rents, but home ownership comes with hidden additional expenses like maintenance, taxes, utilities, and other miscellaneous overheads that are unavoidable. They are bound to creep up at any time, and you would be solely responsible for keeping the house shipshape.
When you are renting, your responsibility ends when you see the rental amount debited from your bank account. Leaky faucet? Peeling plaster? All you need to do is call the owner of the house.
Freedom from and of rootedness
Certainty and security are things that we all seek. Buying your own home gives that in plenty and it’s emotionally rewarding too as it provides a sense of rootedness. Having a place to call home and that which belongs to you is associated with a sense of belonging, which is akin to a warm blanket.
But rootedness can also be binding. Owning a house also results in building a community and a way of life. Not many like to disrupt the little world they have made, and it can hold you back from looking out for better jobs in other places. Renting gives that much-coveted flexibility of being able to move at any given time when a lucrative job comes calling. If it’s in another city, or country even, all you need to do is pack your bags.
Renting gives that much-coveted flexibility of being able to move at any given time when a lucrative job comes calling. If it’s in another city, or country even, all you need to do is pack your bags.
Another certainty that owning a home brings with it is the mortgage. With a mortgage, you are sure of a fixed amount of money going out of your account every month enabling you to work out the rest of your expenses based on this amount. Most often, the chances are that this amount is lower than paying rent as well.
With renting you are never sure of how much you will end up paying if you were to move house. Fluctuating amounts can be unsettling and can prove difficult to budget in savings. It also means sabbaticals and unpaid breaks from work pinch and hurt rather than give you relief as it should.
Stability can go either way
There is stability when you own a home, and that brings in emotional wellbeing and connectedness in your life overall. There are no landlords and owners to push you to vacate without notice, and there are no leases and unfair contracts.
With a rented property, on the other hand, you don’t have to worry about coming up with a huge amount of money that needs to be paid upfront, scrambling to make sure your financial history is spotless to get a loan, and taking on a huge liability.
Loss of money
One of the primary reasons that people lean towards home ownership is to eliminate various risks. But home ownership comes with its own set of challenges. Price depreciation and a stagnant market are two of them. Most of us buy a house, especially the first one, with the idea of living in it for just a few years till we get to our ‘forever’ house. If the housing market is not particularly dynamic at a time when you want to sell, you will end up on the losing side causing much stress.
Then there is also the question of your home never really being your home until your mortgage is paid off. Technically, it belongs to the bank which can seize the house if the need for a foreclosure arises where you are left with no house and no money, issues that can be avoided with renting.
Owning a home and renting one has their own benefits and there is no single winner. The decision to continue renting for a longer period in your life or settle down with your own home is a very personal one, and it ultimately depends on your personal preferences and lifestyle.
Excellent content, keep it up.