Wednesday, December 1
Home>>Property Investing>>Rent or Buy? What’s the Best For You
a hand holding a miniature house
Property InvestingTips & Guides

Rent or Buy? What’s the Best For You

Renting or buying a house is a major financial decision. There will always be a set of advantages and disadvantages to each. Apart from that, this decision also involves many processes because things change. For example, your downpayment savings may increase or decrease, you consider transferring to a new neighborhood, or you are curious what will benefit you in the long run. 

Factors to Consider Before Deciding to Rent or Buy

The Location

It’s all about the location. Depending on where you reside, the decision to buy or rent may be highly influenced by the place you are in. Renting may be the only affordable alternative among expensive real estate markets. Examples of these high-priced markets are Metro Manila, Cebu, and Davao.

If you regularly move cities, constantly buying and selling houses may be depleting your wealth rather than boosting it. If you want to rent the property after you relocate, make sure you have a strategy for property management — and be prepared to pay for it.

Most of those who live in capital cities stay for the short term. Thus, renting is the most viable option if you don’t plan to stay in your current place for a long time, as it has lower prices and offers greater flexibility.

Expensive real estate usually has safer neighborhoods, decent schools, and easy accessibility to public transportation. When you opt to rent, consider the availability of rentals or freshly constructed homes: Are they appealing, abundant, and reasonably priced? 

Depending on your place, tax laws may also change. Unfortunately, a change after your purchase could not suit your financial plans, and it isn’t much you can do about it.

Your Personal Preferences

Ask yourself, what are the sources of your joy? For example, do you treasure security over everything else, or do you want the freedom to move to and from different places?’

People who usually go through life changes, such as divorce or moving out, should consider renting. This way, you can decompress and observe your new lifestyle before making a large purchase.

Maybe you want to inherit a property in life? Or perhaps, you need to save enough deposit; thus, renting is the only choice until you move up the career ladder.

Take note that in renting, you get exactly what you see. Landlords generally do not allow tenants to make significant changes to their houses. Even if you paint a room a bright color or hang wallpaper, you may need to paint it back to the original color before leaving. Landlords may also be hesitant to replace kitchens, baths, or fixtures.

Also, consider how much disposable income you will have left after paying mortgage fees and bills. Maybe your money can be better spent on other financial goals. This is especially true if you have significant student or credit card debt or other short-term goals that necessitate an excellent cash flow.

 In making the decision, always make sure that you are comfortable and confident with what is left of you. 


For future homeowners, the upfront cost of purchasing a house is their biggest barrier. In addition to a down payment, you’ll need to set aside money for closing costs, which could range from 3% to 5% of the loan amount. You will also have to pay for legal processes, including land title transfer and settlement of property taxes.

When comparing buying versus renting, the latter can often come out as the cheaper option. This is at least comparable to the early years after buying a house. If mortgage fees are out of the budget, then renting makes more sense than being financially stretched too thin. You will only have to pay a security deposit upfront. This deposit is usually equivalent to an advanced payment of one month’s rent. 

Over time, hoses require repairs and maintenance. While you’re renting, your landlord will usually handle these costs. On the other hand, if you are a homeowner, you must ready your pocket for ongoing seasonal maintenance and emergency repairs. 

Additional consideration: Will you be able to afford a home that suits your needs in the coming years, or will a limited budget limit your options? For many people, the decision to rent or buy is based on their current financial situation.

Don’t forget to weigh in these factors when evaluating a property. 

READ: How to Determine If A Property Has A Good Price

© 2021. All rights reserved