Is it Okay Not to Buy Your Own Home? - Money Soldiers
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Is it Okay Not to Buy Your Own Home?

For many years, buying your own home was one of life’s ultimate goals.  Along with having children, getting married and having a stable job with a good salary, having your own home was seen as one of the main paving stones on the way to maturity.  Until now, it would seem.

The global housing market has undergone a massive shift in the past few years, with a global depression meaning that thousands of people were kicked out of their homes and many more had to sell because they simply couldn’t afford to keep up with mortgage payments.

Although house prices are down on their boom levels, the cost of living has increased massively while salary rates have remained the same.  This has been the catalyst not only for a shift in the housing market, but a shift in the thinking of those thinking to buy a home.

With banks increasingly unwilling to lend to first-time buyers unable to put up a sizeable chunk of the price of a home up as a deposit, more and more people are deciding to rent on a long-term basis.  But what benefits does this offer over buying, and should more of us be doing it?

Renting Means Less Commitment

Entering into a mortgage agreement is a massive commitment, and not just financially.  When you take out a mortgage on that home, you’re essentially committing to that home and the area it is in until you’ve paid off the mortgage or can sell it.  In certain situations, like having to move for a new job, this might mean selling your home off at a loss.

By contrast, most rental agreements can be cancelled within a set notice period, meaning that you aren’t tied down to a property should you need to move.

Renting Helps You Save

A lot is made of the fact that paying rent is essentially ‘throwing money away’; while you get a roof over your head, you don’t come away from a rental agreement with any tangible assets.

Technically, though, that isn’t true as renting provides the perfect opportunity to save.  In the majority of cases, rent rates are cheaper than mortgage payments.  As maintenance is usually covered by your landlord, you can make a lot of savings there, too.  In some instances, your bills for electricity and water will be covered, too.  All contribute to building up your savings funds.

house 1484719591 Is it Okay Not to Buy Your Own Home?

jackmac34 / Pixabay

It’s Easier to Rent in Vibrant Areas

When you’re young, carefree and have a bit of money to spend because you aren’t looking after kids, you want to live somewhere vibrant, somewhere where you can meet other like-minded young and carefree people.

For most young people, this will usually be the centre of a city or town and the definitive choice of accommodation for city centre living is a swanky apartment owned by some multi-millionaire property tycoon.  Okay, so it might not be the cheapest of options, but why invest a lot of money in a house you might not even want to live in until you’re more inclined to spend a Saturday night in watching reality television?

Of course, there are also disadvantages to renting, the big one being that you leave a tenancy agreement with no tangible assets to show for your years of saving.  Deciding whether to rent or buy ultimately comes down to assessing your own personal circumstances.

Christopher Smith is a writer with a keen interest in property.  He currently writes for Shepherd Gilmour.

This article is a guest post.  If you would like to write for Money Soldiers, you may visit the Write for Us menu for details.

Jesse Fin
 

Jesse worked as a journalist for a large tv station in Korea in her past life. She now works full time at home as a blogger and loves to help her friends manage their personal budgets.

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Shobir | Find Some Money - December 4, 2013

Excellent post Arnel, I rent myself but have buy to let properties. I usually rent big homes so I can sublet the rooms, I pay next to nothing in rent because other people (namely students) pay the full rent. I am putting everything I have in paying off the mortgage for my rented properties so that I can secure a nice stream of income in rent.

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    Arnel Ariate - December 4, 2013

    Wow, that’s excellent, Shobir. We are somewhat in the same situation. I’m renting, too and I also have a condo, which I recently bought, and I’m planning to have it rented out. Unfortunately, in the current condo unit I am renting, subletting is not allowed and so I am paying the full monthly rent.

    Shobir, I am very excited come this Friday. I filed a leave at work this Friday because the condo that I recently bought will now be turned-over to me which means starting on Friday, I can then occupy the unit or have it rented out. Also, on Friday, I am going to the bank to submit post-dated checks for my amortization payment. And, I’m also going to the Philippine Stock Exchange building to open an online trading account. I’ve been wanting to trade stocks for the longest time and finally I will now be able to do it. I am so inspired by the things that I’m learning about the stock market although it also scares me because the stock market is complicated. I can’t wait to share my personal experience here in Money Soldiers about my journey in stock trading. I really want to be an expert stock trader because the intellectual challenge in analyzing the stock market appeals to me very much. I am somewhat a geek, that’s why.

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