Once upon a time purchasing a house used to be one of the wise decisions suggested by our forefathers, yet this trend is changing nowadays, where more and more people are opting for rentals. Although renting a property has advantages in terms of saving money and investing in better high return options. There are pitfalls attached to this approach such as risk of capital security in highly volatile markets. This essay argues that advantages of purchasing a rental property outweigh disadvantages.
In contrast to our ancestors’ teachings of buying a home, renting has become prevalent instead in modern society. Furthermore this approach also makes sense in terms of saving the huge capital required to buy an estate. The sum can be invested in better instruments such as mutual funds or stocks, whose returns are far better than what an owned property can fetch. For example, as per recent financial statistics, a gain from real estate investment is calculated to 4% whereas return from the worst performing mutual fund is calculated to 18%, if invested for more than decade.
On the other hand, not having a fixed asset, can be riskier in the current volatile capitalist market. When the inflation rises, there are higher chances of losing money. In this case, having real estate in one’s portfolio becomes a savior. One can always look at the past, which is tainted with the many stories of people losing millions in bear markets.
In conclusion, even though there is uncertainty associated with not buying a house, this risk can be overpowered with smart money decisions. Moreover, selecting a rental property can be an intelligent decision if one wants to benefit from economic developments happening around the world. Hence, positive aspects outweigh negative decisions.