Real estate is one of the best investments that a person can make. There are so many different ways that a person can invest in real estate that it provides a wide variety of diversification. For example, within real estate, you can pursue business investments where you buy a building and rent it to businesses, or you can make rental property investments your focus.
Another lucrative form of rental property investment is holiday rentals. These are pieces of real estate that maintain and grow in value and depending on their location, can be utilized year-round. In locations that are famous for year-round vacationing, such as Hawaii, Southern California, or Utah, vacation rentals can be booked from January through to December.
While real estate investment is always a great option, the question of whether you should rent or buy a home is also something that needs to be tackled. On the one hand, there are a lot of benefits to owning your own home and growing in equity, however, there are seasons in life when renting is the better option.
One question that a lot of people face in their lifetime, and some people face it more than once, is whether to continue renting or buy a home. This is a great question to tackle as there are benefits to either option that can significantly improve a person’s life. The problem is that this question can often come with a lot of stress.
Renting is expensive, and for some people, this can feel like they are just throwing money away each month and not building any kind of equity. For others, the fear of a mortgage, the insecurity over being tied down to a specific location, and the dread of debt are very real. All of these factors help people feel more at peace with renting rather than owning their own homes.
So when it comes to the primary real estate investment that you should make – regarding your own living situation, which is better, rent or buy? If you have been wondering about the pros and cons of either option, here is everything you need to know!
Benefits of Renting
Let’s tackle the benefit of renting first. The non-negotiable fact is that you have to have somewhere to live. As much as you may want to live out of your car, this option just isn’t viable. Having a physical location to call home where you can cultivate rest, recoup, and recenter is vital.
When it comes to renting your home rather than purchasing, there are some clear benefits that renting has over actually owning. Yes, renting is expensive, and depending on how you rent, you can spend a substantial amount on an investment like this, but there are some clear benefits.
Renting Allows You a Temporary Home
For most people who rent, their number one reason for making this move is that they simply don’t want to be tied down to one location. Yes, they aren’t building equity, but they can leave with relative ease. There are certain key demographics that this is especially impactful for such as higher education students.
If you feel like you don’t want to put down roots, then renting can be a great way to have your needs met through having your own home, without the commitment of purchasing a home.
Financially More Acheivable
For some people, renting might be the most financially achievable method of living. Renting has a great sense of flexibility. With roommates, location, and other factors that affect price point, it’s increidbly easy to save a lot of money on rent. Yes, none of the money that you spend in rent will go towards building equity, however, it can be a financially more achievable goal for certain seasons of life.
Benefits of Buying a Home
On the other hand, for the person who may want to look at something a little more long-term and a better investment, buying is a great option.
Equity, Equity, Equity
One of the biggest pros to buying your own home is that you are building equity in what you purchase. While a lot of people buy a home in a location they believe they will stay in for several years, you don’t have to be married to a certain location for this move to make sense.
In fact, with the rising housing market, it’s never been easier to sell your home which can allow you a lot of freedom when thinking about whether or not to buy. While home ownership is a lot more financially invested and complicated than simply having rent drawn from your bank account every month, the financial benefit is greater.
The decision of whether to rent or buy a home can vary from person to person and depends on a lot of different factors. While renting can afford a more affordable, flexible option for the short term, it can’t compare to the value of owning a home; however, for some people, the temporary season they are in may make buying a home extremely impractical.