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Gillian Jackson, senior business advisor at The Jamaica National Group says buying a house is among the biggest financial decisions many adults will make. She noted, however, that while it 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 both options come with several advantages and disadvantages and that persons should think carefully and assess their own unique situation before deciding.

Miss Jackson noted that among the key benefits of real estate ownership is that it’s an investment that builds equity and generational wealth.

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

“It also provides collateral that you can borrow against in the future, if you need additional income to start a business or to send your children to school.”

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

Miss Jackson, however, noted that among the challenges associated with homeownership are the initial upfront costs of buying a house and the overall costs to maintain a property.

“The reality is that the down payment and other related expenses, including the closing and escalation costs, as well as the various fees, often act as a deterrent to homeownership, as many persons are unable to find that much money upfront. These costs often amount to about 20 per cent of the value of the property,” she stated.

She further pointed out that the overall cost of homeownership tends to be higher than the overall cost of renting. “That is true even if the monthly mortgage payment is similar to or lower than the monthly rent,” Miss Jackson said.

“If you’re not able to afford a mortgage at this stage in your life or you’re unable to come up with the various initial costs to buy a home, then renting might be the best option for you. However, this does not mean that you will never be able to invest in real estate, it just means that you might need to save for a few years and perhaps increase your streams of income so that you can acquire a property,” she advised.

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

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

Miss Jackson noted that another advantage to renting is that it provides flexibility. “Renting means you can move without penalty each time your rental contract ends,” she said.

However, the disadvantages associated with renting are that renters 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 rent by 7.5 per cent annually. In contrast, mortgage monthly payments tend to remain stable and/or fixed over the life of the loan,” she informed.

She also noted that “as a renter you’re at the mercy of your landlord to make repairs and to ensure proper upkeep of the property.”

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

“The truth is that there isn’t always a clear answer to the question of whether to rent or buy. Depending on your life situation and finances, the answer might change over time. No matter what decision you make, it’s crucial that it’s an informed one, based on your financial situation and lifestyle,” she advised.