Debt Management Finance

Buying vs Renting: The Age-Old Dilemma

Choosing to rent or buy your home is a major decision that affects not only your lifestyle but also your financial health. This story attempts to answer the age-old debate from a twenty-year-old's perspective and elaborate why renting is the better choice.

“Some people look for a beautiful place. Others make a place beautiful.”

Hazrat Inayat Khan

The destructive nature of loans is very real. Sure, that small interest rate that comes with the loan you applied to finance your brand-new Mercedes may seem puny. However, do not forget that your loan is stretched over a period of nine years. Add the total accumulated interest amount to your principal. Feel the pain of paying that soon follows.  

Do you know what really baffles me? Why is it that when you finance your private vehicles through loans, society keeps quiet, but when you are renting a property instead of buying, there is immense social pressure trying to convince you that it is a waste of money doing so? Raise your hand if someone has ever informed you that renting is a big money mistake.

In this time and age, there is increasing evidence to suggest that millennials are patiently waiting until their late twenties and early thirties before deciding to step foot into the property market. What this signifies to us is that most of us are still renting in small studio apartments or living with our parents for now.

Have you seen the prices of the properties recently? The insane price tags make you question whether you are living in some sort of dystopian world where even when you are no longer alive on this planet, you still owe your lenders money. Oh wait, we are living in one right now. Sh*t. Unless we do something to settle our debts, living in poverty for the rest of our lives seems like the only option.

Wanting a nice roof over us does not mean we have the financial resources to own one. Obviously, that means we should not buy one right now because doing so is the same as biting more than we could chew. Instead, we would invest our savings into assets and buy a house only when our assets, once sold, can finance our house comfortably. Yes, eventually, each of us would likely own a house, but getting there takes time.

There are numerous reasons twenty-year-olds are opting to rent rather than buying a property. Here are a few reasons, I believe, why renting is a better choice than purchasing a property:

  • Yes, I still must share the common space with other people. Yes, I do not have complete domination over every square inch of the property I live in. However, neither do I have to worry about paying for utility bills nor maintenance.
  • My long goals require me to be moving every couple of years. Purchasing a house would only introduce complications that would jeopardise my long-term visions.
  • Living in an apartment means I do not have to take care of the garden (thank goodness).
  • I do not need to pay for a gym membership because there is a gymnasium on the ground floor for me to access.
  • Dealing with a lease is much less complicated than dealing with a housing loan.
  • I do not have to pay property taxes.

Owning and renting each have their advantages, but what is best for you depends on your circumstances. 

Before I forget, another big perk of renting is that I do not pay for more space than I can afford. Financing your house with a housing loan is somewhat like going down the rabbit hole. Every month for the next 30 or 35 years, you must pay back the lender an agreed amount of money. Personally, I do not want the lender to be gripping my balls for 30 plus years. I believe having more space is more of a curse than a blessing. Having more space means you have to spend more time cleaning the house, and you are more likely to fill the space with unnecessary furniture.

Truth be told, being a homeowner means you must take on heaps of new responsibilities that many twenty-year-olds, myself included, just are not prepared for. For now, I would rather let my money make more money while I am doing things that add value to my life instead of thinking about the right time to buy a house.

Final 2¢: Do We Finally Have An Answer?

“That’s where you are wrong. Not all debts are bad. Buying a house is a good debt. Why are you putting your money into someone else’s pocket instead of your own?  Being a homeowner is the key to happiness and offers security to your future.”

My loved ones frequently bring up the argument above. Logical as it may be, the fact is there is a greater cost to bear when you are buying a property than renting the exact same property. From my perspective, renting grants me more freedom. In other words, when it is time for me to rent a larger space, I do not have to worry about owing the lender any money because I did not borrow a housing loan in the first place. Yes, I may not have the luxury of owning the space, but I rather live with that than being chained by the lender for 30 plus years until I finally settle the housing debt.

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