Disadvantages Of Renting And Buying A Home

Superior Essays
Advantages and Disadvantages of Renting and Buying
Choosing between renting and buying a home is a decision that many will have the opportunity to explore. For some, the decision is a lot simpler to make, than others. Whether you decide to buy a home or, opt for the renting option, neither decision should be taken lightly. The purpose of this essay is to explore some of the advantages, as well as some of the disadvantages to buying a home versus renting one. It will shed some light on why some may choose to continue renting their homes, and why others may choose to bare the numerous responsibilities associated with buying a home.
Advantages of Buying a Home
One of the top advantages of buying a home is the security of having a long-term investment,
…show more content…
The purchase of a house comes with the financial responsibility of making regular financial commitments, and the task of regular home maintenance. There is also the need for extra finances when it comes to owning a home. Extra expenses associated with owning a house typically include taxes, insurance, property up-keep, and various other fees. When it comes time to sell the home, there is a chance that the homeowner will not make any profit from the sale because of the affect that the economy can have on the property values in your area. Purchasing a home can also decreases the flexibility that one has when he or she decides to move. While renters are free to move after fulfilling their lease agreement, homeowners are more likely to rely on the sale of their home so that another home can be purchased. The process of waiting for home-buyer could very well delay the intended move. Another drawback to buying a home is the obstructions such as unpaid taxes, liens, outstanding mortgages, unknown property owners, etc. A title search on a home is the process of retrieving documents to verify the legalities and ownership of the property. A homebuyer could run into trouble purchasing his or her home of interest if there is a failure to perform a proper title search on a home. The biggest disadvantage associated with buying a home is the risk of the bank foreclosing on your home if you fall behind on your mortgage payments. This …show more content…
Some of the disadvantages associated with renting a home include: the restrictions implied by the lease agreement. Tenants are often limited to what changes they can make to the rental properties, or how the property is used. Should an issue arise at the rental property, renters run the risk of dealing with delays if there has been a rental agent contracted to mediate between the homeowner and the renter. Instead of dealing with the homeowner directly, messages would have to go back and forth between the three parties before concerns can be addressed. Another disadvantage is that process of renting does not accumulate assets for the renter. Money paid for rent typically goes in the homeowner’s pockets, or towards the homeowner’s loan to purchase the property. When renting a property, you also run the risk of enduring annual fluctuations in rental rates due to economic inflation, and after the terms of the lease has been reached, there is no guarantee that the homeowner can and or will renew the

Related Documents

  • Improved Essays

    Homeownership In America

    • 1125 Words
    • 5 Pages

    The Role of Homeownership in American Society: Final Copy Homeownership means more than simply having a roof over one’s head. It symbolizes family, safety, comfort, and to some, financial security. However, homeownership in modern America is a double-edged sword. It can still provide comfort, but it can also require that a homeowner take out a massive loan that he or she may not ever be able to pay back. There have been two major instances of housing crises in American history: The Great Depression and the recession of 2008.…

    • 1125 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Some may lend money to housing loan programs just to acquire house while others saves money when buying house. The cost of buying a new house is big while the risk of that the buyer takes is very high. That is one of the reasons why the home inspectors are born. How to hire a home inspector Finding decent home inspector is tough. The buyer will hire the home inspector so better choose the good one.…

    • 859 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    As stated by the chief economist at the National Association of Realtor, this can be partially explained by the fact that many mortgage lenders refuse to give out large loans to individuals with large debt obligations, such as those resulting from student loans (Holland). After college graduation, some young adults choose to move back in with their parents to avoid having to pay rent and other expenses. Approximately 36% of Americans aged 18 to 31 were living with their parents in 2012 (Fry). Because the housing market accounts for approximately 15% of the total economic activity in America, postponing homeownership directly creates negative economic consequences (“Social Benefits of Homeownership and Stable Housing ”). Residential investment, which includes construction of single and multi-family structures, residential remodeling, and production of manufactured homes, specifically comprises about 5% of America’s overall national gross domestic product (GDP) (Greiner).…

    • 1086 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    The Mexican American environment has always been rich in Culture, but poor in money. Cameron county ranks top one hundred of the lowest income in the United States. I’m Yvette Colunga coming from a small town called Weslaco in Texas. I was born in Boise, Idaho then moved down to Weslaco when my grandma got sick. The environment I grew up in was always very hectic.…

    • 512 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Buying vs. Renting a Home: Which Should You Choose? Buying a house is a goal for many, and it’s a great dream to strive for. However, sometimes it really is better to rent a home than own one. How do you decide which one is right for you at this stage in your life? Use this guide from the Degnan Group to compare buying vs. renting a home to understand the pros and cons of each option!…

    • 897 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    vCoal Harbour – Demographics There are many different factors to consider when you are looking to purchase a home. Some of these factors include the general layout of the neighbourhood, the services and amenities that are available in or around that specific location as well as other deciding factors such as commuting distance, access to public transit or availability of green space. Whatever the determining factors are for you, a quick way to understand any potential neighbourhood is by looking at the area’s demographics. Coal Harbour for instance is a sophisticated downtown Vancouver neighbourhood that offers a great selection of spectacular condos.…

    • 581 Words
    • 3 Pages
    Decent Essays
  • Superior Essays

    Stallings Case Study

    • 1015 Words
    • 5 Pages

    When interest rates are increased, potential home buyers have to pay more for their homes. Higher interest rates may force some first-time home buyers out of the…

    • 1015 Words
    • 5 Pages
    Superior Essays
  • Great Essays

    Gentrification, as an idea, seems good and philanthropic. The goal is beneficial for the community in most economical, political, and social aspects. Everybody wants to live in a safe, economically stable, and thriving neighborhood and to be able to provide that same lifestyle to others. However, the process of gentrification, and actually putting those ideas into practice, have been met with unfavorable protests, backlash, and seen some negative results. I vote No on Proposition 555 for a few reasons.…

    • 1944 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    As I walk into the room with my hot cup of coffee, I notice the full circle of chairs with bodies sitting and discussing with intensity the concept of renting versus buying a home. I listen for a while to see exactly what everyone is saying. Majority of the room claim that renting a home is better than actually owning a home for several reasons to include no property taxes, no maintenance problems, and no debt. Essentially they are arguing that it is extremely costly to own a home because when you buy a home you are taking on a massive amount of debt that usually takes anywhere from fifteen to thirty years to pay off. They are stating before you can even move into the house you are required to pay closing cost fees and a twenty percent down…

    • 1071 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Boomerang Buyers Essay

    • 817 Words
    • 4 Pages

    As long as they have maintain a good relationship with the landlord, in the future there is a possibility of owning the home. They should keep track of their payments so that they can establish a good credit score and later on be able to buy with a loan in the future. Over however many years the contract lasts till, the buyer and the seller can come into agreement in whether or not the house will be sold. All of these steps are not set into stone but it is the general concept behind the rent-to-own option in the housing market. Boomerang buyers should know that it is not handy dandy and always like this, but be aware of the process behind it.…

    • 817 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Since the founding of America in 1776 when the colonists declared their independence from Great Britain, the idea of the “American Dream” has come under serious debate. It’s been altered and revised by each epoch of American innovation and individualism, which ultimately has slowly shaped the citizens that now inhabit the USA. Whether or not a human being inside the USA has held a home has not always entirely fit the narrative of the American Dream, but whether or not they had the opportunity to do so. Therefore, it is in my opinion that while owning and living in a home and being well-off in today’s capitalist society is very ideal, it’s having the opportunity to be able to gain that house that is the American Dream.…

    • 1534 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    The first choice would be renting-to-own, and the second would be to stay with an existing family member for some period of time. The rent-to-own option is the better route to choose, for the “boomerang buyers” can then have the time and ability to repair credit history, which in turn will allow for lenders to invest in the customer when desiring to go “all in” on another mortgage, acquire a job and generate income. Seeing that the prices of houses are slightly increasing, but the interest rates are low, between three to four percent, these potential “boomerang buyers” can lock into another mortgage before the interest rates increase. These buyers would benefit most from the rent-to-own option because, depending on employment, income, and credit score, a better interest rate will be offered. These victims of the foreclosure crisis need not to fear as these options are open for them to recover and prepare for committing to another mortgage, slowly but…

    • 1295 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    1)Nicole Manuel, a finance and economics writer with a degree in economics and more than six years of professional experience, states in her article,” The Disadvantages of Renting a Home, that many apartments will not allow for any renovations or major decorative changes to their units or houses, such as changing counter tops or painting the walls. If you choose to buy a home or unit space, you can customize the look of your space with no regulations. You can renovate a room or the entire house to make your home more valuable or more livable. Some apartments also do not allow smoking or animals and have restrictions on the amount of people on a lease. If you own your own home, you can have anyone or any…

    • 1236 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    2008 Meltdown Case Study

    • 810 Words
    • 4 Pages

    In a perfect scenario, for an owner more than half of the houses should be smaller in value, easily managed and paid off if needed without the pressure of losing everything at once. Some of his or her properties could be comparingly larger and much more extravagant, so that in case of a real estate value decrease, not much of possessions would be lost. The 2008 meltdown did teach people to not solely rely on the belief of invariable homes’ increase over time, but in fact possible decrease or loss of it in the long run. With todays’ low interest rates, the rent-to own option is a popular choice in the market for boomerang buyers, but they need to take into consideration unstable markets’ value, leasing agreements and possible rate increase by the Fed before signing the contract. From the 2008 meltdown, the most trustworthy method for boomerang buyers who have been affected by foreclosures and are willing to move into the house again, meanwhile saving their finances for a down payment and work on the credit scores would be the rent-to-buy…

    • 810 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Leasing or renting is allows the company to use some fixed assets by paying a nominal amount of rent. Buildings, cabs, ambulances, are the main assets which are taken for rent. There are two terms in leasing such as; lessee -the company who takes the asset and lessor- the company who owns the asset. The main advantages of renting or leasing are; without purchasing we can use an asset, can use only when the asset is required etc. The difficulties faced by renting or leasing are the maintenance of the asset.…

    • 1046 Words
    • 4 Pages
    Improved Essays