In some countries, most people prefer to rent their homes rather than buying them. What are some of the advantages and disadvantages of renting homes?
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Band 8 IELTS essay sample
In many countries, residents still prefer to own their homes; however, in the more developed countries, they prefer to rent rather than own because of affordability factors, property taxes, and maintenance costs. In addition to financial barriers, changing culture is another influencer. A lot of people, these days, are migrating for jobs; therefore, it does not make much sense for them to stay anchored to a particular location by acquiring property there.
There are several advantages to renting. For a small family, renting a property helps them keep their expenses in check by avoiding mortgage interests, property taxes, and expensive maintenance. For example, in the state of Texas, USA, residents pay as much as 10 to 12 thousand dollars in property taxes a year. That is roughly the same amount they need to rent a two-bedroom apartment. In addition to taxes, mortgage interest could be anywhere between 8% and 12% for a family with average credit scores. Even though mortgage interest is tax-deductible in most countries, it is something the family needs to cough up each month. In addition to expenses, flexibility is another significant factor. The job market trends are evolving all the time and the demand is shifting from one city to another. The cost of moving is much less if the residents are renting rather than owning; owning also restricts cash-flow temporarily because selling a property takes time.
On the flip side, there are several disadvantages to renting that people should take into account. In the past, families remained integrated because of their ancestral homes and its emotional value. We are already seeing that families are drifting apart because they do not have the anchor to hold them together through time. In addition, those who live their entire life in rented homes spend a considerable amount of money on rent which could have been saved for their retirement. For many, it is helpful to fully own the housing to manage through the ups and downs of retirement. Finally, monthly rent is an expense as opposed to mortgage payments that build assets / equity for the owners. Over time, an owned property is another asset that holds financial value.
In conclusion, there are many advantages and disadvantages to renting and owning a property. Those who are in the decision-making process should carefully weigh the pros and cons before making a decision, rather than simply considering the monthly expenses.
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