When it comes to real estate, decisions like these can be a little tricky sometimes, and however both of these options have a list of pros and cons, it is actually entirely up to you to decide what suits you best. This blog article will shine a light on the pros and cons of both of these options and help you finalise on your decision to either buy a property or rent it.
Before we get into the pros and cons of these options, let’s take a minute to understand what are we looking at with these options. Buying a property is a long term investment that offers you benefits that may last you for years and helps you settle down in a place or locality of your choice; it is a commitment for years that you choose to make. Renting a property has its own charms as well, with the ability and options to temporarily own a house, as and when you please helps you to live a nomadic lifestyle, and travel and explore more locations whenever you want. Investing in an Apartment / Flat: residential space or investing in an office and retail space: commercial property, which is more beneficial for a buyer?
Now let’s get into the pros and cons of both of these real estate transaction options starting with
Buying a property
Pros of buying a property | Cons of buying a property |
1. Home for life: buying property enables you to permanently stay in a locality of your choice and enjoy the benefits it has to offer you. | 1. Relocation issue: once you buy a property in one place you don’t have an option to relocate unless you rent a different property or buy a new one. |
2. A great investment: buying a property makes it a great investment option as it enables you to create an asset for yourself that is not perishable and will last for a lifetime. | 2. Property value: buying a property is a great addition to your assets, but there is no guarantee that your asset will yield profits. With an amount of uncertainty lurking, you never know when the value of your property might increase or decrease. |
3. Options of home loans: nowadays there are numerous home loan options available that you can apply for to support you in your investment choices. | 3. % of interest on loans: taking out a loan is a great option until you have to pay a % of interest rate on the loan you take over the course of several years and it can be a pain point sometimes if you aren’t able to pay off your loan on time. |
4. Liquidating option: there is always an option of liquidating your property whenever needed, and getting a certain amount of money for encashing your asset. | 4. Property values fluctuate: although there is an option for you to liquidate your asset and sell off your property whenever you want, it may not always yield a profit for you as the market value of a property has scope for dips and peaks. |
5. Rental income: With the option of owning your property, you have the option of renting your property out for supplemental income. This way you get more out of your investment without putting much into it. | 5. Wear and tear: renting out a property makes it prone to wear and tear over the years, especially when you can’t keep a constant check on how your tenants are maintaining your property. |
6. Access to locality facilities: buying a property in a good locality will ensure that you get the most out of your purchase and enjoy the amenities in your locality such as good marketplaces, nearby transport facilities, good schools and other things. |
Renting a property
Pros of renting a property | Cons of renting a property |
1. Easy move: renting a property allows you to move or change your locality whenever you want without any ties to your rented place. | 1. Continuous increase in rent: although it is easy to move, everytime that you shift, you sign a lease with your landlord that has a provision to increase rent (in most lease agreements) after every year or two |
2. Easy scouting: you can easily scout for rental places and find numerous options with respect to your budget and any other requirements you have. | 2. No creation of assets: a big con of renting a property is that you have a liability to pay rent regularly but there is no creation of assets, so ultimately, you are paying a hefty amount but not creating something for yourself. |
3. No maintenance issue: with rental properties you don’t have to worry about the maintenance issues as landlords generally take care of it, and otherwise there isn’t much upkeep work to do in the first place. | 3. No interior change option: with rental spaces, there is not much you can tamper with, this means that you cannot customize your house according to how you want until and unless you spend money on things that you can take away with you. |
4. Choose where you want to live: the greatest pro of renting a property is that you can choose where you want to stay and what locality suits you better, along with that, you can choose your neighbourhoods according to what your needs are. | 4. Shared facilities: unless you rent an independent house, you have to share the facilities available to you with other tenants in your building. This means that you have to share your parking spaces and rooftop access and other such facilities amongst many other things. |
Real estate is a huge market where you can find several different properties like co-working spaces or guest houses and even your villas and builder floors. Deciding what you should buy is a decision that you need to think through before finalizing on it.
Now that you are aware of the pros and cons that each of these buying options have, it should certainly help you clear your mind and make a decision on what you should go for, and what option is the right option for you.
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