Renting vs buying a home, which is better, the pros and cons? For many of us home buying, (Home Ownership) means that we have arrived. There will always be the ongoing debate, home buying vs renting. We have to look at our own individual situations and needs to determine what is best for us at the present, home buying vs renting. Home ownership is usually the biggest financial investment that we will make in our lifetime.
• When you purchase a home you will begin to build equity. Hence, when you sell your home it very well may be worth much more than when you bought it.
• Your mortgage balance will be reduced every year until it is paid off.
• If the interest rates go down, you have the option to refinance, thus lowering your payments.
• Home buying gives you more flexibility and freedom to do what you want within reason, and you don’t have to ask permission to paint! Of course some Home Owner Association’s will want you to check with them before you paint the exterior.
• Home Buying and home ownership gives you a sense of pride and accomplishment.
• You have more private space for playing with the kids, planting your favorite flowers, or relaxing with a good book.
• You usually have the same neighbors for a much longer period of time.
• Home ownership gives you more clout in the world of credit.
• When you buy a home, you are stimulating the economy and giving many, job opportunities.
If you feel like renting your home out, you can, without anyone’s permission unless you are in a Home Owner’s Association. They may have rules regarding rentals.
• The real estate is YOURS!
• When buying a home you will need more upfront money.
• Home ownership means that you are responsible for all of your home maintenance including the lawn.
• Your mortgage payment does not include paying for your water and trash pick-up.
• You can’t just pick up and leave without first selling or leasing out your home.
• Property taxes are due every year, which help to pay for services and run the county.
• If you are moving short term, then by all means renting or leasing is your best option until you know where you are going to settle.
• You may have no choice but to rent if your credit is sub-par.
• You may not care about the tax benefit and not want the responsibility of home maintenance.
• Short leases allow you to be flexible to move when the lease is up.
• You are able to pick up the phone and call the landlord when there is a maintenance problem.
• Your living space is usually smaller in an apartment. You have less privacy with neighbors all around you.
• Kids typically have a smaller, shared area to play in.
• More often than not the annual rent increases, and you can’t refinance into a lower rate or payment.
• Permission is required when making any upgrades or improvements to your unit.
• You cannot move someone in or lease out your unit without permission
• Replacing the carpet takes an act of Congress.
• You need a good landlord to handle your home maintenance needs.
• The property is not yours and never will be.
• You aren’t building any equity when you pay rent.
• The BIG ONE, you don’t get ANY tax breaks!
In making the determination in renting vs buying a home, one would be smart to evaluate the low interest rates and capitalize on home ownership before rates go up. Buying a new home has never been easier with the historically low interest rates. Consequently, this is causing high vacancy rates in apartments. Furthermore, it is contributing to the fierce competition among Property Managers and Landlords trying to win your business. They counter this by offering lower rents, teaser rates.
When interest rates go up and home ownership seems out of reach landlords have free will to increase your rent.
New York Times Rent or Buy tool is a tool that could help determine which option may be best for you, renting vs buying a home. Do your due diligence to make the best decision for you! For any further information or assistance please don’t hesitate to contact me,