7 Reasons Why Renting is Better than Buying a House

One of the most sought after dreams of many Filipinos is to own a house. With the growing number of OFWs and relatively well-paying jobs locally, real estate companies and developers look at them as potential clients. It’s no wonder that condos and subdivisions are popping up in almost every corner of the country.

Historically, Filipino families either have existing land to build their own homes, or buy a new one, or rent a home from someone else.

While both renting and buying have their own respective advantages, renting can be considered to be a better option for you especially if your financial capability is not yet fully-established, i.e. no steady job yet, indebted, or still saving up for a brand new home.

Here are seven reasons why most Filipinos with no properties can have better financial edge by renting than buying a new one.

1. Relatively Small Downpayment

When you buy a house or condo, you are normally required to pay a significant amount for the downpayment. This is ideally around 15% to 30% of the total amount, depending on the developer or property company.

On the other hand, you do not have to pay a huge downpayment to move into a rental apartment. Although the exact amount varies, the usual downpayment scheme is you pay 1 month deposit and 2 months advanced rent. This is still significantly less as compared to buying a house.

2. Lesser or No Repair Costs or Maintenance Expenses

If you own a property and there is a need to repair a part of the house such as a leaking roof or a damaged door knob, there are no other recourse but to pull out some of your money from the bank or from your emergency fund.

One sure advantage of renting is that you have minimal to no maintenance cost to pay off at all.

When you rent a property, your landlord takes care of mainly all the maintenance and repair costs. Unless the damage is intentionally done by you.

3. Access to Privileges and Amenities

Another advantage of renting over buying your own house is you get to access some amenities that would normally cost thousand of pesos. Examples of these are in-house swimming pools, fitness gyms, basketball courts, tennis courts, clubhouse use, among others.

While these are readily available and enjoyed by most homeowners, renters are surely on the better side since they just have to pay for the minimal monthly fees to access these amenities.

4. No Real Estate Taxes

Obviously,  you do not have to pay real property taxes or the amilyar if you are renting.

Real property taxes is one of the many burdens, if I may say, for property and homeowners. These has to be settled on either quarterly or annual basis. Failure to pay on time will result to corresponding penalties.

When you are renting, you are free from experiencing this additional burden and responsibility.

5. Freedom to Transfer Anytime

In today’s rising cost of living and plunging prices of goods, many people struggle to make ends meet.

If you are renting, you always have the option to transfer and downsize to a more affordable apartment or condo unit.

Also, when the location of your apartment becomes prone to natural calamities such as flooding, or has become a hotbed for criminals and unwanted neighbors, deciding to move out and transfer is much easier.

When you are a homeowner, it is more difficult to do this especially with the challenge of selling your home at a premium desired price. We’re not even talking about the so many processes to go through the government agencies and the fees and taxes you have to settle when selling a home.

6. Fixed Rent Amount

Another advantage of renting is that you pay a fixed amount of rent according to your lease agreement.

In the Philippines, landlords normally only raise the rent upon signing of the new lease agreement and this don’t normally happen in the first few years.

Meanwhile, those who bought houses in installment bases have to brace for fluctuation in mortgages, association dues, insurance, property taxes, and other fees.

7. You Create New Friendships and Networking Opportunities 

While this last reason may sound cheesy, this is non-monetary reason is relatively true according to my personal experience.

Unless you are the type who makes enemies in every apartment you live in, the experience of renting in different neighborhoods and cities can provide you opportunities to meet new friends and network with them for possible business ventures or a new career path.

Deciding on Whether To Buy or Rent

Owning a home can be beneficial for many people over the long term. I just want to share with you my experience of purchasing a property a few years back for retirement purposes. Little did I expect that we will be benefiting from it financially by renting it out via Airbnb and Booking.com.

As a matter of fact, I am already a SuperHost on Airbnb for having been able to rent it out to many short-term renters and travelers who are looking for options to stay for leisure or business purposes away from the city. 

You may check out my property here>> Casa Malarayat on Airbnb

But here are few reminders for those who are planning to buy their first home soon: Make sure that you have sufficient funds and savings to pay for the downpayment, the monthly amortization, and related fees.

It is also important that you are already free from other loans and debts so that paying up for home amortization would be lighter for you.

Everyone in the family should have also decided to stay and live together in your new home and community for good without second thoughts.

Choosing whether to rent or buy a new home is a personal or even a conjugal decision. Before making that hasty move, see to it that you have already reviewed the details and the pros and cons of renting or buying.

In any case, you should be enjoying your stay in the house you have chosen whether you are renting or have bought it for good.

Rock your way to abundance!

#moneyliferocknroll

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