Why buying is a better option than renting?

Whether to buy a facility or to rent it has indeed become, one of the most fundamental decisions to be made in everyday life given the ever changing political and socio-economic conditions of the world. A large number of professionals belonging to the business of real estate provide a lot of reasons in support of their assertion that buying a house is profitable and preferable over renting one in a number of ways. This paper provides a rationale for the argument that buying is better than renting a facility.

Thesis statement

“Buying a home is always more profitable than renting one”.

Rationale

Some of the reasons why a facility should be bought rather than rented are explained below:

Cost comparison

Let us take the example of a home. It is an established fact that renting a home proves far more expensive than purchasing one. A person wants to rent a home for a period of 6 years. Owner of the home implies a rent worth $500 per month upon the inhabitant. Total cost the inhabitant will pay for the home over the period of 6 years sums up to $500 x 6 years x 12 months/year = $36,000. It would have saved the inhabitant considerable amount of money had he opted for purchasing the home in the start as there are many additional expenses involved in the rent including insurance and maintenance expenses. Also, the government offers a deduction of tax from the mortgage interest an individual pays provided that an individual owns the property. (Jones, 2009). In addition to that, the inhabitant will not own the property after 6 years have passed in case he chooses to take the home on rent.

Freedom of use

The one time investment in buying the home in the start will not only provide him with the permanent ownership of the home, but also, he can set the home on rent and make it a source of income. This way, he will also be able to recover a considerable portion of the sum he paid in the initial investment by the end of 6 years. An individual can also use the building for other commercial purposes as he likes in addition to setting it on rent.

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Even if an individual chooses to live in the home he buys, he has all the freedom to make whatever changes he likes in the home that most people who live on rent are not provided with by the owner.

Time value of money

One of the most fundamental reasons why a home should be bought and not rented is that money looses its value as time passes. It is always profitable to purchase a property in the present than delay the idea for a later stage in life, because same property would cost far more in the future than what it does today. Moreover, a home always sells at a price much higher than what it was purchased at as the area in the surroundings develops. (Lee, n.d.).