Renting has long been a popular choice among most individuals, but what's even better is owning an affordable home. Let’s explore the benefits and drawbacks of both renting and homeownership, shedding light on why under certain circumstances, owning may be a more financially rewarding option.
The perks of renting
Renting is undoubtedly a convenient choice for those with uncertain income or those focused on expanding their revenue streams. The ability to terminate a lease with proper notice, absence of property taxes, and often lower monthly costs make renting an attractive option. It's an ideal solution for those who prioritize flexibility and don't want to be tied down by property-related responsibilities.
The power of homeownership
On the other hand, owning your home presents a myriad of advantages that extend beyond just having a place to live;
1.Flexibility and affordable repayments - Did you know that instead of paying rent monthly to your landlord, you can pay an almost similar amount to a bank and own a home? Incentivized home loans featuring a fixed annual interest rate within the range of 9% to 9.9 % per annum, make homeownership now more feasible than ever! The amount applicable is up to Kes 8 M, while repayments span up to 25 years. Rentscore will help you to establish your affordability through our affordable home loan calculator accessible on Our Website.
2.Building Equity and Generational Wealth - By investing in your own property, you're not just paying someone else; you're investing in yourself .Every mortgage payment you make is one step closer to owning your home outright.
3.Cushion from rental increment - Owning a home safeguards you from the uncertainties of rental increases that might necessitate relocation.
4.Tax benefits - Mortgages taken for owner occupied properties enjoy a tax relief of up to Kes 25,000 per month consequently reducing your taxable income.
5.Customizability - With owning a home comes all the wiggle room to turn it into your personal oasis. You can go with wild colors, decor and renovations without needing anyone’s approval.
Renting Risks Vs Homeownership Challenges
Renters face the constant threat of rent increment and the possibility of eviction upon notice. They also lack the ability to make significant changes to their living space without the landlord's approval. In contrast, homeownership comes with the potential burden of a non-liquid asset and the challenge of time-consuming property sales. Additionally, the substantial upfront deposit (ranging from 20 %-30% of the sale price) may be a financial challenge for some. Owning a home also demands increased responsibility and financial discipline.
The decision to rent or to own ultimately depends on individual circumstances, financial capabilities, and long-term goals. While renting provides flexibility, different types of property investment such as homeownership offers a unique opportunity to build wealth, create stability, and enjoy the satisfaction of truly owning your piece of the world. Consider your priorities and financial situation carefully to determine which path aligns with your aspirations.