美國奧斯汀州立大學留學生dissertation：Rent or buy a house

 

 

The dilemma is the most tangled and difficult problem to solve, and there is usually no standard answer to it. Buying or renting a house is just that kind of dilemma. For different reasons, some people tend to buy a house while other people prefer to rent a house. Moreover, according to the individual circumstances, it was suitable to buy a house for some people while others are suitable to rent a house.困境是最復雜和難以解決的問題，這通常是沒有標準答案的。購買或租用的房子就是這樣的困境。由于不同的原因，一些人傾向于買房子，而其他人更愿意租房子。此外，根據個人情況，適合買房子，而另外一些人可租的房子。

 

 

There are three reasons for people to buy a house. To begin with, people want to buy a house is because that buying a house can make people more stable. There will always encounter a variety of problems when renting a house, such as high rents, such as bad lot, expensive rent, the unpleasant cooperation with the landlord, and so on. Frequent moving cannot be avoided because these problems when people renting a house. But as long as there are sets of our own room, we can settle down; in the second place, many people tend to buy a house is because of their concept of home ownership. Over the years, the Chinese people always have a strong purpose to have their home ownership. The traditional concept of financial management always has made people to buy a house as their first choice. The pursuit of wealth is often not only for themselves, usually for the next generation, even under the next generation. And perennial social unrest makes people worried about their wealth carrier, so the real estate is regarded as the most reliable property; the third reason for people to buy a house is that the funding risks of buying a house is smaller. A lot of people think that the risk of buying a house is smaller than holding cash to rent an apartment. 

有人買房子的三個理由。首先，人們想要買房子是因為買房子可以使人們更加穩定。總會遇到各種各樣的問題當租房，如租金高，如差很多，昂貴的租金，與房東不愉快的合作，等等。避免因為這些問題時，租房搬家頻繁不能。但只要有自己的房間設置，我們可以安頓下來；第二點，許多人傾向于買房子，是因為他們的置業的概念。多年來，中國人一直有一個強烈的目的有其屋。傳統的財務管理理念總是買房子作為他們的第一選擇的人。追求財富常常不僅為自己，通常為下一代，甚至下一代。和長期的社會動蕩使人們擔心他們的財富的載體，所以房地產作為最可靠的財產；人們買房子的第三個原因是，買房子的資金風險較小。很多人認為買房子比持有現金租一間公寓的風險。#p#分頁標題#e#

 

 

As the report goes, the rent and existing funds in the hands are variational, for instance, $1000 rent in the future may turn out to be 2000 or 3000, and in the case of inflation, 80 million cash is likely to shrink to 500,000 in the future or even lower purchasing power. Therefore, in the case of increasingly limited supply and tightening of land, buying a house will be more secure and less risky than the preservation of the funds.

 

 

And there are three kinds of people who are more suitable to buy a house. First of all, white-collar singles are suitable to buy a house. They can buy a second-hand house as a transitional. The present urban white-collar workers in china generally have higher level of education. With the continuous increase in income, drifting heart always want to have their own nest. But for single people, when buying a house, their actual situation must be considered, such as the working place of the other half. In addition, the white-collar singles must bear the monthly payment by themself, so low-cost second-hand house is a good choice for the white-collar singles. It is noteworthy that for single white with high income levels, the changing of the workplace and other uncertainties may affect housing resale or rental, so when buying a house, the investment potential need to be considered. Therefore, the best choice of area for buying a house is the mature business district and the shopping convenient area, as rental will be easier. Second kind of people which is suitable to buy a house is the older youth. And they can buy a small house in the city. These people has a certain amount of savings on hand, their work is relatively stable, so if they are ready to get married, they can choose to buy their new home in the city, such choice is still relatively large(Knox 125). But at the same time, raising children and the future plan of buying a car must be also taken into account, so purchasing of house for marriage does not need too much big. Third kind of people which is suitable to buy a house is the rich of multiple houses. They can venture to purchase the mansion. Large area mansion on the market will be very scarce. At present, signs of price increases have begun to appear for a small number of luxury real estate. Professionals recommend that for buyers whose economic strength is very strong may consider the purchase of luxury, even if it is not self-occupied, the rate of return on investment is quite optimistic in the long run(Kim 101).

 

 

There are also three reasons for people to rent a house. Firstly, renting a house can save more money. According to the analysis of the industry, now the price of buying house is indeed too high, in some developed cities in china, the average price of house is 15,000 Yuan per square meter, a 90 square meter-house is worth to nearly 150 million Yuan, if 400,000 down payment, loan 20 years, the month payment will be 4,500 Yuan, while in the urban, the rent of a two-bedroom house is up to 3000 per month, and it will be more cost-effective if sharing with others(Ayuso 371). Therefore, according to the comparison, the month payment of buying a house is too much higher than the monthly rental. Secondly, buying a house will bring too much pressure, especially for people whose economy is not so well-off. Buying a house may be good thing, while enjoying the psychological comfort of buying a room, buying a house blindly regardless of their economic strength probably lead to the greatly decrement of people’s life quality. Many problems can occur, such as , under economy pressure, people may afraid to change their jobs, have enough money for entertainment, fear of bank interest increment, fear of illness and unemployment, and even do not have time to enjoy life. In china, the word “house slave” is used to describe the people mentioned above. "House slaves", that is, the slaves of the house, they make money not for the support of his wife and children, for enjoy life, but to support the house. To buying the house, they carry on a dozen or even 20 years of debt, the high payment will not only deprived them from enjoying life and some entertainment, but also make them become a work machine. Thirdly, renting a house can be more mobility and flexible. When people are under good economic condition, they can rent a better house, but when life changes, they can always adjust. But after buying a house, when the economic burden is too heavy, under heavy loans under pressure, they had to reduce the level and quality of life, and they may even be in trouble (Ayuso 291). 

 

 

And there are three kinds of people who are more suitable to rent a house. The first kind is the young people who entering the workplace. In general, the young people who just entering the workplace can hardly afford the expensive month payment. According to the rental price, it will be more suitable for students just out of college to rent a house. The second kind is the people that of huge job mobility. In recent years, due to job mobility increment, change jobs and job-hopping has become commonplace for young people. Buying a house when the work has not yet formed a relatively stable, once the place of work changed, it will result in that the distance is far between the place of work and residence, and along with, a lot of money transport costs will be needed. The third kind is people of instable income. Once the national interest rates increased, the loan pressure for people buying a house will increase as well. People of pool job stability, if not combined with practical considerations of economic conditions, blindly loan to buy a house, it will be not only difficult to repayment for them, but also their house may be forfeited by the bank since they are not able to afford the month payment.

As for the problem of whether buying or renting a house, people in china and America also have the different point of view. In china, most people tend to buy their own house instead of renting a house the case of they are under good economic conditions. Even for those young people under weak economic foundation, they still tend to buy a house with the fund from their parents, only those are under poor economic condition and cannot get financial support from their family will choose to rent a house. On the other hand, in America, more than half of Americans choose to work for 10 years, married for 5 years before buying a house (Campbell 90). They usually rent a house to live. Young Americans tend not to ask for their parents’ help when buying a house. Their first thought is to go to the bank loans to buy a house.

 

 

In summary, loan to buy a house or to pay rent, it not only requires the consideration of national economic trends, the economic balance of payments, finance and investment ability etc. are also need to be considered. Only on the basis of the actual situation of their own, the dilemma topic of whether renting or buying a house will be reasonably solved.

 

 

REFERENCES

George Knox, Jehoshua Eliashberg, “The consumer's rent vs. buy decision in the retailers” International Journal of Research in Marketing, 26, 2 (2009):125–135.

Juan Ayuso, Fernando Restoy, “House prices and rents: An equilibrium asset pricing approach”, Journal of Empirical Finance,13, 3( 2006):371–388.

Juan Ayuso, Fernando http://www.400190.com/thesis_sample/ Restoy, “House prices and rents in Spain: Does the discount factor matter?” Journal of Housing Economics, 16, 3(2007):291–308.

Kabsung Kim, Jae Sik Jeon, “Why do households rent while owning houses? Housing sub-tenure choice in South Korea” Habitat International, 36, 1(2012):101–107.

Sean D. Campbell, Morris A. Davis, “What moves housing markets: A variance decomposition of the rent–price ratio” Journal of Urban Economics, 66, 2 (2009):90–102.