Rent or buy? Not sure which option to opt for? It can be a difficult choice to make specially in these times when the country is going through a financial crisis. However, your decision need not be difficult. This blog talks in detail about both ways of getting a property. Let’s look at all the pros and cons of both to make an educated decision.
What does owning a property entitle you to?
First of all, what does owning an asset, property or anything really mean? By owning an asset etc., we mean buying the asset against an amount agreed upon between the seller and the buyer. In order to buy property, you pay a certain amount to the owner and then the ownership of the property is transferred to you. However, there is much more to owning property than just buying it against a sum of money. Although it is a good thing to own property whether be for personal use or investment purposes, it comes with some extra responsibilities. A simple breakdown of these responsibilities is listed down below and will be further discussed in the blog:
- Property maintenance
- Property tax
Pros of owning property
Even though owning a property can be a challenge for some, it has its own benefits:
- A piece of land, a house or some other real estate entity is always an asset. The value of these kind of assets appreciates over time. This is due to many factors out of which location and good maintenance top the list.
- When you buy property such as a house, you have full ownership of it. You can sell it for profits and later use that profit to further invest in other properties. This is a healthy activity especially in Pakistan. Many people have made fortunes through this business over time.
- Owning property is a sign of financial stability. It entitles you to your own space where you can do as you like. In rental houses, a lot of property owners bound their tenants to refrain from quite a lot of things. However, if you own a house, you can live as you like without anyone’s approval.
- You can use your house for financial activities i.e., giving a part of it away on rent. This way you have a place of your own and you can also generate a steady income on monthly basis. You can use this surplus money in a lot of ways, and it can come really come in handy. Most people don’t utilize their houses to their full potential. In a lot of cases a few rooms stay vacant through the life of house. Instead of keeping them vacant you can put them up for rent which can be extremely helpful.
Cons of owning property
Although there are quite a lot of pros to owning a property, there are some cons as well. It is up to you to decide whether the pros outweigh the cons. They are listed as follows:
- To buy a house, you need large sums of money. In countries like Pakistan where credit form of payment is discouraged, it can be a problem for many. It is not easy to accumulate large sums of money for everyone.
- Owning a property is not only limited to buying it. It comes with some responsibilities that you need to take care of:
- A major part of owning a property and properly keeping it is its maintenance. A lot of people don’t consider this while making their purchase decisions, but this is an important thing to keep in mind. To extend the life of your house and to get the maximum years out of it you need to maintain it properly. It can range from electrical work, plumbing or just simple cosmetic maintenance. A lot of house societies nowadays require you to maintain your house a certain way. If an issue occurs, you will have to get it fixed and sometimes these fixes can be expensive.
- Many people experience issues in their homes over the years. It can be a simple thing such as a broken faucet to a more major issue such as burst drainage pipes. No matter the issue, you will have to get it fixed since it is your property. Untimely repairs can cause damage to your house and affect its life.
- This is a major thing however it gets easily overlooked, specially by those who are new to owning homes. Property taxes are an important thing when it comes to owning property. If you don’t want to pay a certain amount in taxes, you might want to reconsider your decision of owning a property.
- If you want to move from one property to another, you cannot just get up and go. You will have to sell your existing property first to gather the required money. This is specially an issue for those who don’t have extra sum of money available to them. Getting a buyer can be a challenging task and even if you do get one, selling your house includes some legal procedure.
Renting a house and how it is different from owning one
There is a fundamental difference in renting a house and owning one. Essentially renting means getting a property or a piece of property without the ownership factor. You pay a certain amount to its owner each month and they let you live in it or use it depending on the type of property you rent. A lot of people opt for this option since it seems cost efficient to them in the shorter run. However, it is not so if you think of long-term investment in rent.
Pros of renting a property
- You don’t need to pay huge sums of money. Depending on your agreement, you pay a certain amount each month. However, that amount is significantly small relative to the sum of money you need to own a house.
- You can shift from property to property in case it does not fit your needs. This can be convenient for many who like to uplift their living standards as their income increases. All you need to do is notify the house owner and pack your stuff. It does not include long legal procedures etc.
- If something breaks in your rented house, it is paid by the house owner mostly. Since it is their property, it is their responsibility to get things fixed. It doesn’t mean you shouldn’t use the house carefully. Always take care of the house like its your own. This not only speaks about your high morals but is also extremely helpful for the house owner.
- You don’t have to worry about any property taxes. Everything is taken care of by the house owner. Thus, you just have to worry about house rent and nothing else. This can be extremely helpful for people who don’t have much left after their monthly expenses.
Cons of renting a property
Just like everything has pros, they come with cons as well. Similar is the case with renting property.
- Renting a house doesn’t give you full ownership. This means if the owner wants to sell their house or have it vacant for their personal use, you will have to vacate their property. Finding another house that fits your needs can be a challenging task. Moreover, if the
- Since you don’t have full ownership of the house, you will have to compromise on a lot of things. For example: A lot of homeowners don’t allow pets in their houses. If you have a pet, you will have to find a property that allows pets. This can be frustrating as not everyone house fits your needs.
- According to the law, the rent of your house gets incremented after certain intervals. This can be a financial toll for many. Most people have fixed incomes. Their incomes don’t get incremented every year or month. Therefore, it gets difficult for them to arrange that extra sum of money that gets incremented after intervals.
Renting vs Buying
If you are someone who has large sum of money available to them, you should go for buying a house. It is more secure and is a better option financially. Property’s value appreciates over time. Specially in Pakistan, where real estate is a good way of investing money, it is a good asset to have. Expenses such as property taxes can be intimidating at first however the overall idea of owning an asset is far better than renting one. The security of having your own house is superior. You have all the freedom to live as you like and do as you please.
While renting a house isn’t as big of a burden initially, monthly payments amount to large sums of money over long period of time. In the long run, you end up paying the same amount if not more. Even though you end up paying huge amounts of money you don’t have an asset that you own. Thus, you end up losing more in the longer run. Hence, this shows that buying a house is a more viable option than renting one.
For people who cannot manage large sum of money, you can find loan schemes that allow you to buy house on installments. This way you can pay almost the same amount of money you would for rent depending on the type of loan scheme you get. This can be a cost-effective way for a lot of people to allow them to buy house.
Ways of buying a house in Pakistan
There are multiple ways of buying a house in Pakistan. If you have the required amount, you can pay the money up front. However, if you lack the funds, you can get a low interest or no interest schemes for buying a house. There are quite a lot of banks that give people the loan they require in order to buy a house. You can pay the money on monthly installments. Depending on the plan you have opted for, you can get easy monthly installments. They amount to almost the same amount of money you would end up paying for rent.
In Pakistan, zero interest housing schemes have been launched by the Government of Pakistan. This initiative is especially for people who do not have large sums of money available. If you fall in the same category, this can be a good solution to your problem. Instead of paying rent, pay the same installments to the government and you will get the ownership once your installments are complete. These types of initiatives are specially launched to uplift the people, so you should avail these opportunities.
What is the benefit of these schemes you may ask? The biggest benefit is, you won’t have to pay large sums of money up front. You will pay the same amount of money you would pay for rent. However, once your installments are complete you would get the ownership of the house. This is not possible if you rent a house. Moreover, since it would be your house you can put up a part of it for rent. This way, it can help you in managing the rent. This can be an effective way of getting the house of your dreams.
Bodla Group and their emergence in Pakistan real estate industry
For many years, Pakistan has been witnessing the same groups of builders. Their conventional way of business provides almost no value to customers. Moreover, there have been instances where customers did not get what they were promised. We are an emerging real estate company that offers multiple services. Our projects such as the ones in DHA Multan speak highly of our premium quality work. We are committed to providing and maintaining high standard work that provides more value to the customers. You can get the house of your dreams by contacting us and we will build it for you. If you wish to buy already built houses, we have an excellent team of brokers that can help you in getting the house that fits your requirements. Contact us today to make your dream come true.