Disadvantages Of Renting And Buying A Home

Better 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

  • Decent Essays

    Homeowners may pay a reduced interest on the amount they paid on the loan that is on the mortgage. Predictable housing expenses: A homeowner determines the expenses for a home and it could be more predictable because the responsibility of the home lies with the owner. Some disadvantage of owning a home are Substantial financial obligation: As a homeowner, there are annual financial obligations to repair and maintain the home, insurance, property tax, and monthly mortgage payment that could affect the cash flow (Siegel & Yacht,…

    • 1198 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Essay On Home Warranty

    • 444 Words
    • 2 Pages

    It will give you the protection your home needs, while you are rebuilding your reserves. A home warranty is a selling tool if you are trying to sell your older home. Older homes can be a bit scary for some home buyers. There is a perception that something will go wrong quickly and cost a lot of money. The warranty can reassure buyers that, if something goes wrong, there is protection in place.…

    • 444 Words
    • 2 Pages
    Decent Essays
  • Decent Essays

    This created problems such as approving people for homes with damages. Some damages, that the homeowner couldn’t afford to fix. High interest rates and bad loan contracts affected homeowners in such a way, that contracts that they were into or trying to get were just not…

    • 829 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Boomerang Buyers Essay

    • 817 Words
    • 4 Pages

    Boomerang buyers should know that it is not handy dandy and always like this, but be aware of the process behind it. The rent-to-own option is an enormous market as not all homeowners are willing to let go of their homes too. Nowadays it is also harder for “all in” purchases because not everyone has a good credit score to qualify for a loan for mortgage. The rent-to-own does not usually require a loan as the renter and seller just need to come to agreement in the contract of the monthly payment. This way both the seller and buyer are benefiting from it.…

    • 817 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    One of the advantages of value range pricing is the wide spectrum of buyers it may attract to your view your home and make an offer. The con to this listing method, you may find yourself getting several lower offers for the home rather than getting the home’s fair market value. As the seller, you always have the option of countering the offer or declining it. At the same time, if the home’s features justify a higher price and you’re in no hurry to sell the home, you can wait for a higher offer. This method of thought defeats the purpose of the using value range pricing from the start.…

    • 992 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Even if a potential buyer is ready to start renting, his or her credit score may not be. If the potential buyer has been renting an apartment since the foreclosure and loss of the home they were paying a mortgage on, then their credit score probably hasn 't gotten much better. In fact, the renter’s credit score probably dropped a bit lower. Renting an apartment does not help one’s credit score. In a perfect world, getting payments in on time would be enough to guarantee one’s ability to “rent to buy”, but alas, it does not.…

    • 840 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Having seen how to lose an asset, one could be even more focused to ensure that it does not happen again. Individuals having a second attemptat the housing market would hopefully mean having learned from the previous mistake. The homeowner’s mentality should be to not make the same fatal flaws that put them in their current situation. There will be a conscious effort to budget responsibly, accrue one’s bank account or accounts, pay off outstanding bills and do this within the comfort of their own home. Create an environment of economic security for your own benefit.…

    • 828 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    There is an agency that regulates unethical behavior for home inspection services. Not all lenders require a home inspection, so sellers may skip the home inspection and agree to pay the extra cost for repairs at closing. As the seller if you can afford to sell the home for less or have a sufficient profit after all of the costs have been paid through escrow this option may work. In most cases, this is not the best solution for the seller or the buyer and realtors do suggest a home inspection to save money and list the home for full market…

    • 949 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Renting to own would be one of the more favorable choices because by doing so you’re allowing yourself time to gain back the financial footing needed to purchase a home, relieve the potential stress that comes with leaping into a steep commitment and allows the buyer to build credit to qualify for a home mortgage loan. Rent-to-own is the best option for those suffering home foreclosure because it allows people time to financially build back on their feet while living in a home potential for ownership. After falling in the misfortune of home foreclosure, it becomes extremely difficult for victims to seek external financing to help put them in another living quarter. With this particular option, potential buyers are able to enter an arrangement, typically 3 to 5 years, where they pay an agreed…

    • 810 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    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! Why You Should Rent a Home Sometimes, renting makes more sense than buying a home. Three reasons why you may prefer to rent are for flexibility, less responsibility, and more convenience! Flexibility If you’re just starting out in a new career, or planning to move again soon in the future, buying a house probably isn’t for you.…

    • 897 Words
    • 4 Pages
    Decent Essays