Thinking About Buying Property? Think Again

Posted: March 15th, 2009 | Author: Mo2 | Filed under: Finance, Mortgage, Planning | Tags: Advantages of buying, Advantages of Renting, Commericial Property, Disadvantages of buying, Down Payment, Finance, Financial Planning, House, Housing Maintenance, Investing, Investment Property, Mortgages, Principal Residence, Property, Residential Property |

You often hear about the debate of buying or renting property. It really depends on your preference and financial situation. There are advantages to both and you should really think hard if you want to go through owning property and having to think about the responsibility that comes with it. While renting can be easier to deal with as you can leave whenever you want, what you pay you won’t be seeing again unlike a house that you could own.

The Advantages of Buying Property
The best thing about buying property is that you will have a place that is “yours.” The property that you buy will also be an investment for your future, as property prices will generally rise over time unless something crazy happens like the recent Subprime mortgage crisis. Having your own property can be useful in other ways such as being able to use it as collateral and can potentially improve your credit rating and get you loans at better rates.

The Disadvantages of Buying Property
The biggest pain about buying property is the down payment that you have to come up with. If you’re buying property with cash, you won’t have to worry about this obviously, but having to come up with a chunk of cash to buy a property is what keeps so many people renting. I will talk about down payments for a mortgage in tomorrow’s article.

The next big pain is paying the mortgage on a frequent basis. This can be just like rent but you can’t just opt out like rent by just moving out to a cheaper place, you are locked in unless you sell your property which you will obviously want to avoid doing.

Owning property can also lead to greater responsibility, as you will have to think about maintaining the property. Every little problem you will now have to take care of yourself unlike when you were in an apartment building. You can’t just call the building manager, you have take care of the problems and pay the bill for each little thing and that can add up over time.

The Advantages of Renting
The greatest advantage of renting is that you can simply move out when you want. There really is no obligation to stay at a place unless you are on a lease and are locked in for a certain amount of time. That leads to less responsibility, and like I just mentioned, if something goes wrong you could just call the building manager to take care of most problems.

The other advantage is that you won’t have to worry about paying a mortgage. Sure you still have to pay rent, but you can always reduce the amount you pay by moving to a cheaper place, especially when things start to go wrong such as a job loss.

The Disadvantages of Renting
When you rent, you obviously don’t own and this is the biggest disadvantage of renting property. You can also only do so much to your property and this can be a headache when you want to paint your walls florescent purple or have 4 dogs.

Mo2 Thinks
At the end of the day, it really boils down to you. What do you want and can you afford it? It also depends on the housing market. If the prices of houses are very high then it probably is smarter longer term to simply rent and wait for the market to settle so that prices become a little more affordable.

The next big issue is coming up with the down payment for a property. For many, this is a huge issue as it could tens of thousands of dollars and possibly more. Just coming up with the down payment could take years of saving and planning but should be worth it and should be the goal of many. Come back tomorrow to read about what a down payment is and how you should save for it.

Thanks for reading, remember to bookmark this daily updated finance and investing blog written by Mo2!

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