Renting Is Better than Buying - Essay Example

Introduction: The issue of renting or buying an apartment is encountered quite frequently in the present age. In order to accord with the growing needs of the business scenario, people have to move from place to place as per the requirement of job. Stations are generally temporary and employees are frequently required to move from one station to another. Such a work setting does not allow the employees to develop association with the places of residence. Renting an apartment is better than buying one, particularly for the working class people who are employed and do not have their own business. Cost benefit analysis: Renting an apartment remains quite economical as compared to buying one. With the passage of time, renting proves to be cheaper than buying an apartment. It is always advisable to make a cost benefit analysis while deciding whether to buy or rent a home (Vij). Where renting a house costs an individual as much as $500 on the average, the same house may cost an individual between $1000 and $2000 per month in the form of mortgage that further gets factored to accommodate tax and insurance. Also, in the recent years, “rents have barely budged while house prices in New York, Washington, Los Angeles and elsewhere have doubled, renting has become a surprisingly smart option for many people who never would have considered it before” (Leonhardt). Whenever an individual has enough money to invest, it is advisable to estimate the difference of the mortgage payment and the rent, and invest that sum into the stock market. Benefits of renting: Acquiring the loan for constructing a house is quite a lengthy and tiresome process. An individual is supposed to possess excellent credit and a considerable sum for making down payment. Good interest rate can not be gained without a good investment sum. Buying a home requires an individual to owe the lender money for many years that follow. Renting the house provides the individual with the leverage to pay as long as he/she lives in it, and later decide as per convenience. When an individual owns a home, he/she essentially becomes responsible for all matters that concern the accommodation’s maintenance and appropriate functionality. When the sewer line in a house damages, it is the owner’s responsibility to fix it and bear all expenses. The plumber may need to dig up the earth in order to change the existing pipe, or lay out a new one. Such activities consume a lot of money, which the owners have to pay. In comparison to that, people living on rent do not have to bear the additional expenses of maintenance and fixation. If something becomes faulty in a rented apartment, the renter makes a call to the owner to get that fixed, without having to pay for the job. Likewise, a person on rent does not have to pay for the maintenance of lawn or other areas of the house. The renter only has to compensate for the damages that have been caused by him/her. Renting a house does not require the renter to have insurance because of lack of ownership. All a renter is required to have at maximum is the “renter insurance” as it makes it cheaper for the renter. Taking all these factors into consideration, a working class employed person enjoys far more benefits in renting as compared to buying a house. Analysis in light of economic recession: In the contemporary age of economic recession, a lot of owners are selling their homes in order to meet their daily life expenses. The widespread economic recession has caused a lot of business entrepreneurs to downsize their workforce in order to minimize the overhead charges and maximize the profits. Renting proves to be the most convenient and flexible option for such employees, whose jobs are endangered and who can be fired any time by their employers. Such people want the facility to shift anywhere anytime as per the need of the employment. However, it is always advisable to acquire a short term lease in order to escape early termination fee. The prices of homes all over the world have generally faced a decline in the recent years owing to the economic recession. In the years to come, these prices are expected to go down further. In addition to that, the value of property fundamentally depends upon a lot of demographic factors that include but are not limited to crime rate and the job market in the locality. It is quite normal for an individual to incur loss as a result of buying a house. This may happen if the value of property goes down because of lack of job opportunities or any other facility in the locality. Conclusion: Buying or renting a house is undoubtedly, one of the most important decisions in the life of an individual, and several factors need to be taken into consideration while making this decision. It seems quite appealing to hear the statement, “when you buy it, you own it, else you don’t!”, though it should be realized that unless the price of the home has been paid in full, no one really owns it and it takes years to pay off the mortgages in full. In a vast majority of cases, mortgages are heavy enough to consume more than what an individual really earns, thus putting an individual under the load of debt for years to follow. Renting the home provides an individual with the opportunity to have more financial freedom. A renter has more choices for investment as compared to an owner. The renter can invest money in business that can pay him/her enough to construct a home later in life. Last but not the least, renting a house allows an individual to shift any time as per the changing needs. Many times, it so happens that an individual becomes quite upset because of irritating neighbors, and wants to shift. A renter is free to move in such cases while an owner is not. Works Cited: Leonhardt, David. “Is It Better to Buy or Rent?” 2005. Web. 6 Mar. 2011. . Vij, Vikas. “Why Renting a Home Is Better than Buying in the United States.” 2011. Web. 6 Mar. 2011. . Read More