Lesson 05 : Housing Choice - Ownership Versus Renting
Rental Housing
It is the first step to home ownership and for many families it is a long-term lifestyle.
Rent is money paid to live in a dwelling that is owned by someone else.
Landlords or owners, offer renters (called tenant) many types of housing from small apartments to single family houses.
Lease, or rental agreement, is a written contract that lists the rights and duties of both landlord and tenant.
A family may wish to live in a rented house when the family does not want to invest in immovable property.
When the job is transferable.
When other economic priorities like education, marriage of children etc. are more important than housing investment.
At times rent is provided by the employers to their employees.
Advantages of Renting a house
It usually costs less to rent than to own a home.
The family that rents never suffers a loss of capital through the decline of property values.
The renting family has no responsibility for the management and upkeep of the property in which it lives.
The family that rents can move to another dwelling as housing needs change.
If the family’s income is reduced, it can rent a less expensive dwelling.
If the family’s income increases, it is free to move to more desirable dwelling.
If the house is unsatisfactory of if better housing can be found elsewhere, the family is free to move.
The renting family is not tied by the investment in a house if it wishes to take advantage of a promotion or to change from one from of work to another.
Disadvantages of Renting a house
It is seldom possible to find a suitable house for renting in a locality you want to live in.
In the case of scarcity of rental houses it becomes hard for the family to rent a suitable accommodation within their means.
The family living in a rented house cannot have the fullest satisfaction of furnishing and decorating it in their own desired way.
The family renting a house may not feel secure as the landlord may try to get his house vacated for any reason
Quarrels and litigation between the landlord and the tenant of the house are quite common; these cause loss of peace of mind for both.
Renting on a short-term basis, such as month to-month, can be more expensive than a Monthly mortgage loan payment.
Longer-term rentals are more likely to be less expensive but landlords will often raise the rent at the end of the rental agreement period.
Increase in house rent will ultimately increase family's housing cost.
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