Renting an apartment is a better option than buying a house - Essay Example

Why renting is a better option than buying? A lot of professionals dealing in real e business offer a lot of justifications in favor of buying ahouse instead of renting one in an attempt to boost their sales. Their reasons are often far from reality and are ignorant of the underlying issues people doing jobs frequently encounter. They make one realize the benefits of having a permanent place of residence. Of course, who would deny the sense of identity and weight a permanent property offers an inhabitant! However, buying a house does not suit all classes of people. “Renting an apartment is a better option than buying a house for people who have unstable jobs, who have to move frequently due to their job or lifestyle, or who have financial difficulties.” Renting or buying a house is a very critical decision in the life of job employees all over the world. This is attributed to the fact that most of the employees have no job security and might have to move to another city for a new job. Even if that is not the case, most jobs require the employees to keep visiting or moving to distant places for work related purposes. The employees seldom know what is going to be the next destination. Traveling is a fundamental requirement of work. In such circumstances, employees mostly hire a flat or occasionally, a hotel to reside in while they stay away from the base station. Even in the base station, they are either provided with accommodation through the company, or else, manage to live on their own. They achieve this by renting a flat or house. Very few employees live in the base station with their families. Most share their accommodation either with the colleagues or friends in the locality in an attempt to shed off some load of the rent. Hiring a house remains convenient for working class citizens because they have little difficulty changing their residence as per the requirements of the job. Buying a house is like growing roots in a particular place. One can not move around freely with one’s roots implanted in a certain place. Either an individual has to loose connection with the roots, or else, the job. The latter is often not favorable as it tends to expose an individual to financial crisis. In this case, one has to invest all one has in a house and yet, not live in it. Investing all the money to buy a home that can not be lived in is indeed, very stressful for an individual (Pascale, 2009). This is only one aspect that denies the suitability of buying a house for a job employee. There are many other factors and all make renting a house more beneficial for a job employee. This can be realized by analyzing the formalities associated with buying the house. A vast majority of the job employees do not have all the money to buy a house. In such circumstances, they consult financial institutions like banks for loan. The lenders offer to lend money but take hold of some property or assets of the borrower as a guarantee. Down payment is often referred to as “down painment” because of the pain it puts the borrower into (Venezia, 2010). Not many working people have all the assets to satisfy the curiosity of the lending financial institutions. Ultimately, lack of funds puts the intention of buying a house totally out of question. Even if the borrower had the required amount required as mortgage by the bank, banks offer to lend money but demand the return with interest. The interest imposed on such loans is compound interest and not a simple one because of which, the interest multiplies instead of adding as more and more time passes without repay. Let’s assume an employee fore-calculated all the money that would be required to return the loan along with interest in a certain time period in the start. What is the guarantee that he/she will remain employed for the duration? Absolutely none! Employees who have job as the only source of income can not satisfy the bank’s requirements and are often susceptible to bankruptcy if they attempt to buy a house. A bank legally holds right to sieze the house in case money is not returned in full along with interest (Life123, 2010). Therefore, they are left with little choice but to rent one. Job employees usually earn only enough to live a respectable lifestyle. Most of them usually have little to leave for their children. However, they earn enough to get the children educated enough so that they would be able to make money for themselves. So renting a house suits them. In addition to the working class people, many others who do not do job but are financially weak also can not buy a house. Renting often proves far more economical than buying a house for every one as long as one does not use it for business. Only if the purchased house is set on rent or used as any other source of business, one can recover the money invested in it. Otherwise, it does not remain economical unless one lives in it for long. Buying a house may be better than renting but it may take very long for that (Bluejay, 2010). “Paying a first and last deposit doesnt compare to the big chunk of change required for a down payment on a house.” (Arkins, 2010). Conclusion: Renting a house is much better than buying for numerous potential reasons particularly for job employees and others, with a weak financial status. Buying a house proves very costly than renting one because of down payment and interest loaded return of loan. Money invested in a house can instead be invested in profitable business so that a house can actually be bought after retirement. I grant that owning a house lends an individual a feeling of contentment and satisfaction, one can even do many kinds of business using one’s own home like setting a portion on rent or else, commercializing part of it. Still, I maintain that the decision to buy or rent a house is to much an extent, case specific and the financial status and work status of an individual. References: Arkins, A. (2010). Money: Make the most of your take-home pay. Retrieved from http://www.salary.com/Articles/ArticleDetail.asp?part=par241. Bluejay, M. (2010). The ultimate rent vs. buy calculator: Which is better, renting or buying? Retrieved from http://michaelbluejay.com/house/rentvsbuy.html. Life123. (2010). Mortgages Guide. Retrieved from http://www.life123.com/career-money/real-estate/mortgages/mortgages-guide.shtml. Pascale, C. (2009, June 5). Buying a Home to Later Turn Into a Rental: Things to Consider When Puchasing Investment Property. Retrieved from http://www.suite101.com/content/buying-a-home-to-later-turn-into-a-rental-a122657. Venezia, C. (2010). Down Payment Secrets - How To Raise The Cash You Need. Retrieved from http://ezinearticles.com/?Down-Payment-Secrets---How-To-Raise-The-Cash-You-Need&id=404182. 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