Growth and Jobs | Should I rent or buy a house? | New


GILLIAN JACKSON, Senior Business Advisor at Jamaica National Group, says buying a home is one of the most important financial decisions many adults will make. She noted, however, that while this is a dream for most Jamaicans, the reality is that it is not always the best financial option for everyone, depending on their lifestyle, needs and circumstances. .

She said that both options have several advantages and disadvantages, and people should think carefully and assess their own situation before making a decision.

Jackson noted that one of the main advantages of real estate ownership is that it is an investment that creates equity and generational wealth.

“Historically, buying a home has been one of the most effective and efficient ways to build wealth over time. Real estate has proven to be a good tool in your financial arsenal when it comes to passing on wealth to your children and your children’s children, ”she said.

“It also provides a guarantee against which you can borrow in the future, if you need the extra income to start a business or to send your children to school. “

She added that real estate is a safe and stable investment, that it is a good hedge against inflation, that it can be used to generate passive income, and that it also gains value over time.

Jackson, however, noted that among the challenges associated with home ownership are the initial costs of buying a home and the overall costs of maintaining a property.

“The reality is that the down payment and other related expenses, including closing and escalation costs, as well as various fees, often act as a deterrent to homeownership, as many people are unable to find so much money in advance. These costs often amount to around 20 percent of the property’s value, ”she said.

She further pointed out that the overall cost of home ownership tends to be higher than the overall cost of renting. “This is true even if the monthly mortgage payment is similar to or less than the monthly rent,” Jackson said.

“If you aren’t able to pay a mortgage at this point in your life, or if you can’t figure out the various upfront costs of buying a home, renting might be the best option for you. . However, that doesn’t mean that you will never be able to invest in real estate, it just means that you may have to save for a few years, and maybe increase your income to be able to acquire a property, ”she said. advised. .

JN’s Senior Business Advisor noted that this is part of the reason renting might be a better financial option for some people, as the overall cost of renting a property is cheaper than buying a home. .

“When you rent, your monthly and overall house expenses tend to be more predictable and cheaper. Your landlord will take care of all repairs and maintenance, and your upfront costs are less and more manageable than the purchase, ”she said.

Jackson noted that another advantage of leasing is that it offers flexibility. “Renting means you can move out without penalty whenever your rental contract ends,” she said.

However, the downsides associated with renting are that tenants may be forced to move suddenly if their landlord decides to sell the property, or they may face unpredictable rent increases.

“In fact, a landlord can increase the rent by 7.5% per year. In contrast, monthly mortgage payments tend to remain stable and / or fixed throughout the life of the loan, ”she explained.

She also noted that “as a tenant you are at the mercy of your landlord to make repairs and keep the property well maintained.”

Jackson noted that before people make the decision to rent or buy, they must first keep legal, financial, and lifestyle considerations in mind.

“The truth is, there isn’t always a clear answer to the question of whether to rent or buy. Depending on your life situation and your finances, the answer may change over time. Whatever decision you make, it is crucial that it be informed, based on your financial situation and your lifestyle, ”she advised.

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