Renting or Buying a House: Which One Is for You?

Buying or renting a house? Which one is for you? With property price keeps rising every year, is buying a house still worth it?

renting house in indonesia or buying house in indonesia, sewa rumah atau beli rumah
Minute Read

4 mins

Published

07.10.2021

Category

Lifestyle & Tips

If you are like the majority of the people, where you are on the fence as to which one, or whether either of these options will be a good choice. Be it buying or renting a house, both options are a major deal that can affect your future, especially your financial health.

Lokalist will guide you through the process of deciding if it would be better to rent or buy. Here are some ways you can figure out which one is right for you.

renting house in indonesia or buying house in indonesia, sewa rumah atau beli rumah

Benefits of Renting a House

  • Cost Saving & Affordable Price 

Rental rates are attractive on their own that buying a house can not match when compared to mortgage rates, down payment, closing costs, and other expenses. With renting a house you do not need to worry about fronting for things like property taxes which make the price of renting a house become more affordable, even renting allows you to live in a better-quality home than you could afford to buy.

Although renting a house can be an option for cost savings, long-term tenancies as it gives you more benefits than short-term tenancies. 

  • More Flexibility

Another benefit of renting a house is definitely the freedom it can give you. Say you want to pack up and move to another city or country, it is easier for you to break lease agreements than sell your house, and—probably—a lot quicker too. Renting allows you to practically live anywhere, even in a most sought-after city, while homeowners are restricted to areas that they can only afford to buy. 

Disadvantages of Renting a House

  • No Right of Ownership

Unlike buying a house where you will have full rights to homeownership once you have fulfilled your mortgage, you have no right to homeownership nor permanence when you rent a house. This can be the biggest disadvantage with rentals as you may feel like throwing money without having anything back, and at the end of the day, you will not get any return on the property that you are renting.

  • Limitations

Most rental houses do not allow you to make a fixer-upper to the house, like renovations, or upgrades—or at least, not without the landlord’s consent. But what you can do is probably bring some accent through furniture that can balance the aesthetics of the house that you rent or add some greenery to the front or backyard to make it more homey.

Benefits of Buying a Home

  • Long-term Investment & Stability

Buying a home has traditionally been considered more stable than renting a home. As property prices keep on increasing over time—it provides you the biggest benefit of owning a house, which is value. Because when you are buying a house, you are also building equity. The value of your home grows as the house market value increases. Meaning, you are likely to earn a profit from just living there and waiting for the market to rise in value. Not only that, owning a house also acts as a stable asset that you can pass it on to your children.

  • Full Right of Homeownership

By buying a house, it means that you have full rights to the house, where you have the right to alter your home to your asset, such as to rent it out, or even to sell it once the value of your house increases. Buying a house also allows you to build and design your dream house as it lets you have total control over your house, there will be no more limits on renovations and upgrades.

Disadvantages of Buying a House

  • The Risk of Being Stuck in the Wrong Property and Bad Credit

It is no secret that costs are the biggest and probably the main barrier for someone who wants to own a house. Therefore, a loan or mortgage is the way out. However, not a few are actually unable to pay off or continue their home installments, and in the end, the bank or developer will confiscate the house to cover the losses.

Buying a house is also a big and long-term commitment. So, there might be chances for us to be trapped in the wrong property, such as an unhealthy environment, unstrategic location, or—a turn out—high crime rates. Which will then make it difficult for you to sell the property in the future.

So, before you apply for a mortgage to the bank, make sure to carefully budget how much you can spend and afford, do not let the house installments become a burden for you in the future. Also, do you research the area and neighbourhood before you decide to buy a house.

  • Maintenance Fee and Property Taxes

As a property owner, you are obliged and expected to pay a variety of fees, including taxes. Also, as a homeowner, maintenance costs must also be taken into your account. Usually, if our house is damaged and repairs are needed, the costs that must be incurred are not small. By owning a property, you must be prepared for these unexpected maintenance costs. Plus the cost of electricity and water that you also have to pay every month.

Deciding whether to rent or buy a home is one of the biggest financial decisions one can make in their life. So, which one is for you? It all comes back to your needs. If you want something long-term, and perhaps a long-term investment and you are financially ready, then buying a house is the answer. But if you are looking for flexibility and less commitment, renting a house is something you should try to consider.