Buy a Home or Rent one? It’s Time You Decide
Is housing a good investment? Not too long ago, buying a house, as soon as an individual could afford, was considered a good investment decision. The decision, however, has hurt the financial future of a lot of people in the last few years. Therefore, before an individual makes the own-or-rent decision, it is imperative to take a look at the finer lines of both the options.
Renting vs. Owning a Property
The decision of renting or owning property in the past was majorly dependent on whether an individual preferred living in a house or apartment. Owning a condo at present, allows an individual to own a multifamily residence, which has higher renting opportunities than an individual house. If someone, for instance, invests in apartment homes in San Angelo or any other part of the city and wants to rent it out, there is a high chance of getting easy returns.
When Homeownership is “Not” Advisable
Housing is a great investment, but only when the economy is blooming. If an individual makes a down payment of 20 percent, a price rise of three percent increases the homeowner’s equity by 15 percent. By looking at the price declines in the recent times, a decrease of 20 percent after a down payment of 20 percent would wipe out all the equity of the homeowner.
Renting a house implies the landlord is responsible for taxes, maintenance, insurance and other utilities. On the other hand, homeownership comes with additional responsibilities such as taking care of the monthly installments of the property and other maintenance bills, which is an additional expense. Before you decide, compare the monthly EMIs of the house with the current rent to figure out the difference.
Remember, the transaction costs are bigger in housing and a real estate agency could charge anywhere between six to seven percent as the sales commission. When the owner decides to sell off the property, the commission is going to make a lot of difference to the profit.
Making a choice between renting or buying a property could be difficult, given the fluctuations in the economy and steadily increasing number of affordable rental apartments. Renting has more advantages, specifically when:
- The rent is lower than the monthly mortgage payment
- The tenant might not stay at the same place for a long term
- The housing market is expensive, such as in metropolitan cities
- The prospective homebuyer has limited funds, which might be insufficient to bear the down payment and additional costs
Last Few Words
Current financial position and future plans of an individual play a significant role in making a home-buying decision. Cities such as San Angelo don’t have a dearth of affordable rental homes, and therefore, it might be in your favor to rent a property, rather than buying one. Kington Properties, a family-owned and operated property firm, provides premium yet affordable multifamily apartment home in San Angelo and Lake Jackson. To find an ideal rental apartment that fits within your budget and requirements in these cities, feel free to speak with one of our representatives.