Which is Which? Owning a House or Renting One

Whereas it’s a good idea to own a home, renting is nowadays coming up as a considerable option. This is a difficult decision to make especially considering that owning a home is a cultural issue. There could be several factors to consider when deciding to either own a home or rent a house. They include financial status; long term plans among others.

Luther Vandross, the late renowned R&B artist, in his song, A House is not a Home, argued that a House is not permanent as compared to a Home. He further says that a room-in view bedsitter, a manyatta, mud house etc -cannot be a home; one is bound to move.

Living in such (a house) is a ‘Nomadic Decision’.

Whereas one can change houses, especially the rented ones at will, that cannot happen to a home. There is an argument that those who rent are modern nomads; they purposely move—especially those whose jobs are fluid.In Kenya, the vision is for everyone to own a home, thanks to the rise in demand for the real estate. It’s a mindset planted in people. The sector is appreciating every day. This is a justification by Luther Vandross’ lyrics in his song. That, home ownership takes precedent. This means there are several benefits in home ownership.

It’s advisable for people who rent elsewhere to own homes in places they prefer; for, one can customize a home to a level of their suitability. It is not easy to own a home in every town. What is the economic sense in this scenario? Owning a home or renting.

Let’s start with owning a home: that, when owning a home-in Kenya-it’s providing a secure place to shelter one’s family. Aside from shelter, one provides financial security, economic satisfaction, independence and self-actualization.

Financial security comes about when one uses the house as collateral while borrowing a loan. This increases one’s bargaining power. It’s a retirement package for a retiree too.

Renting has its advantages—one is not deterred so much from moving, there is no much investment needed while paying except when the landlord raises rent, maintenance costs are minimal, limited control of the property etc.

Further, staying in another person’s house is creating wealth for the owner of the house. If the house is yours, investing in it, one easily builds equity. It is purely a financial decision that one must consider.

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FA Prof Tom Nyamache is a certified Financial Analyst | Email:[email protected]