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Deciding whether to rent or buy properties in Philippines
Buying a home is not for everyone. It could be a potential mistake for one who has no plan to stay long in one place because of job placement, migration or other considerations. It takes time to sell and in the meantime you have to go on paying the mortgage, if there is one. Wait until you plan to settle down in one home for a much longer period.
There is a smaller amount of up-front deposit when you rent a home, unlike buying a home when the cost of downpayment can be very big. The monthly rental is often fixed for the duration of the lease unlike buying where you have to continuously pay for years until the title is transferred.
Renting gives you flexibility in staying in one place at least till the end of the lease. After the lease you can always move out or renew the lease. The rentals should be much smaller than if you were paying mortgage for a new home. Maintenance cost is practically minimal compared to home ownership and there are no taxes and timetables to worry about.
Any increase or decrease in equity does not rebound to the lessee. As for the owner, the equity may go up, down or remain stagnant. During the period of stagnation or "buyer's market," it may be difficult to sell at your asking price. That is one risk if you are forced to sell, but in the long run, the price of your unit will go up.
Compare your monthly rentals against the amount of monthly mortgage. If the two figures are not much different, it is time to own your own home. In due time, the cost of renting will be greater than the cost of your monthly amortization.
In case you are leasing a home, try to schedule your timing near the expiration of your lease or you may end up paying for the unexpired lease. One way out of this dilemma is to ask your landlord to allow you to "escape" the unexpired lease. Do not sign any long term lease if you have plan to buy a home of your own.
The advantages of buying instead of renting are numerous. But the most important reason is that you get to own the house by paying a little more than you are presently paying for the rent of your home. A lifetime of renting won't make you the owner of a home. Even with regular increases in salary, unless you start to buy a home, the price of the house will always stay one step ahead of you because of inflation.
Owning a home gives you a sense of pride and joy of ownership and more autonomy and control that home ownership affords. There are many things you can do within the confine of the house that you cannot ordinarily do with rented premises.
Unlike renting a house where you say goodbye to the money you pay for the monthly rentals without ever owning it, owning a home breaks the cycle and frees you from the landlord who has the power to dictate on your rent.
There are many types of houses which comprise most of the homes we encounter in buying or building a house. There are the condominiums and townhouses which are governed by some government agencies and the single-family detached homes for those who prefer more privacy, duplex for those with smaller income, coop, apartel used as apartment and hotel, and various combinations of the above. Each one has its advantages and disadvantages.
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