Home Buying Versus Renting

Generally speaking, home buying is a much better process than renting. This is true only under certain conditions. Buying isn’t a good option if you are not planning to stay in the house for at least 3 years. Under such circumstances, renting is a better option. And if you buy a house you will not see the benefits of owning a house for the next 5 to 10 years. There are few other benefits of renting a house and they are as follows. You do not have to take the pain of repairing a damaged structure or look after the maintenance of the house. So, renting is good if the amount you are paying as rent is low and not very high.

However, if you are buying a house, you may have to take care of the maintenance work and repair a structure if it gets damaged but the most important aspect of home buying is that sooner or later you will be the owner of the house. And even if you are making payments for your mortgage, you are paying the cash to become a homeowner. You are not paying your hard earned money to someone else.

If you are renting a house, you are “throwing away” your cash. If you opt for the home buying option, over the years you will be building up equity in the property that can be of immense help to you in future.

How does your insurance need change in case of renting and buying?

As far as your insurance needs are concerned, there is difference between a homeowner’s insurance and a renter’s insurance. Let us see how.

Home insurance will cover quite a lot. It will include almost everything. It can be the ceiling, walls, furniture in the living room, television set etc. However, renter’s insurance is different and it offers a more narrow coverage. Often it is thought that the landlord’s insurance covers the personal belongings of the renter too. But this is far from true. If you are the tenant, it is your responsibility to insure your personal belongings.

So, if you are a tenant you may be of the opinion that there is very little that you have to insure but statistics say something else. Reports suggest that an average renter owns approximately USD$20,000 worth of belongings that are not insured at any point of time by the landlord’s insurance plan. In fact it has been observed that tenants are more prone to theft as compared to the landlords. Reports provided by the U.S. Department of Justice state that tenants are approximately 79% more likely to be victims of burglary as compared to the landlords. Despite the fact, only 43% of the renters buy renters insurance.

There is good news for renters though. Renters insurance is more affordable as compared to homeowners’ insurance. In order to find out which is better, you can make use of free online calculators that can help you to decide the same.

Recommended Sites

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