There are many things to take into consideration when you are trying to decide whether to rent or buy. We have gathered up some helpful information to guide you in making this important decision. Take in all the information and figure out what pros and cons really matter the most to you.
A couple of things that quickly come to mind when you think about the benefits of renting; not tied down any longer than your 1-2 year lease, you don’t have to worry about maintenance, and you don’t have to come up with a large down payment. You also are not at risk of losing equity of the market happens to turn south.
However, there are also some cons that come with renting; first of all you are renting, you don’t have the pride of ownership that comes with owning your own home. You are not in control of your rent increases, and sometimes rent can go up faster than inflation. You are also not growing any equity, so you are not contributing to your overall wealth. You are also at the mercy of your landlord about the overall appearance of your home, you are not often allowed to paint or make changes or upgrades to the look of your space.
Home ownership can come with some disadvantages. First and foremost is the price can be very intimidating and the upfront cost of a down payment and closing costs can be pretty high. You are also tied down to that property and could lose equity if the market turns sour and you need to move quickly. You are also responsible for maintenance costs such as the yard or the roof and fixing anything that could break like the plumbing or electric work. Home owners insurance and property taxes are also costs that can sometimes get over looked when people purchase a home.
Achieving ‘The American Dream’ and having your own home are great sources of pride for many people and that comes with many other benefits too. You are able to grow your equity; as the market increases, so will the value of your home and you are able to sell your home for a profit or take out other loans against your home. Paying your mortgage on time can increase your credit rating. You can make all the changes and renovations you want to your home as long as you follow any historical or zoning regulations. Want a bright pink kitchen? You can do it when you own your own home. There are also great financial benefits to buying; your mortgage can be cheaper then rent because you are not paying landlord and there are some great tax benefits, like deductions for your mortgage interest.
We hope this was informative and was able to help you weigh the pros and cons of buying a home or renting. If you have decided that buying a home is something you would like to pursue in the near future, please reach out to us and we would be happy to guide you down the path to home ownership.
Thank you to Cara Fust, Transaction Coordinator for this blog.