Buying versus Renting in the pandemic – How will you decide

Has the “Novel” coronavirus changed the mindset of the people about seeking the right option as far as buying and renting is concerned? While the impact of it is not very “noble” worldwide, and even if it has changed the mindset of the people to some extent and for a few, renting is still an affordable option for now.

And this holds true due to the cash crunch that everyone is facing owing to job loss and layoffs that is taking place across the globe for the pandemic.

So, it is better to look for a safe temporary haven for now. And you can buy your own nest once the slowdown in the economy has divorced the economic and socio scenario worldwide.

United States – A Renter Country

The United States has always been a “renter nation” and interestingly, one of the main reasons the property market is much sought after now is that many people are buying property so that they can rent it out.

And the advantage that these investors enjoy includes a steady earning from the rental property, benefit of capital gains, and tax benefits. Consequently, this trend has made prices of the home go up, and your dream home’s availability looks uncertain.

Buyer sentiments

Despite the fact that renting is always a better option, you will come across many that firmly believe that investing in a house will benefit them after their retirement. However, what they fail to realize is that after retirement if you require money, you cannot sell off the house promptly.

There will be hindrances if the housing market is not doing well or there are political upheavals that cause disturbances in the socio-economic make-up of the society. So, it becomes uncertain.

That does not necessarily mean that you opt for rented property only to use emergency loans for rent. If you are renting a property you must be sure about the mode and source of payment that will fund your rent.

Points of comparison between renting and buying

Let us go through a few main aspects that will help you to decide which is best for you.

Buying a home

  1. You have a long-term real estate asset
  2. Enjoy tax advantage
  3. You can rent out the premises and earn rent
  4. Avoid paying high rental charges every month
  5. Investing in real estate has proved to be beneficial always

Renting a home

  1. You do not have to worry about down payment
  2. Obligations related to mortgage can be avoided
  3. No extra cost for property maintenance
  4. You are free to move to and from any part of the globe without hassle
  5. Avoid the fear of collapsing real estate market and consequences

What to consider before taking a decision

There are few questions that you must find answers to before you can decide upon renting or buying. These are as follows-

  • Are you prepared to take on the burden of buying, maintaining, and most importantly “getting tied down” to own a property?
  • The kind of lifestyle you have been leading, will investing or renting a property allow you to continue with the same standard of living
  • Are you in a position to pay your mortgage payments if there is a rise in the market price and rates? This holds true if you have opted for floating or flexible rates of interest, which is influenced by the dynamic market scenario.

No matter what you decide, it is important to keep in mind that you must be able to sustain the expense, whether you have to incur the expense as monthly rental or making down payment and mortgage payouts over a period of time.