Is it Better to Rent or Buy?
This is the age-old question that has many people split depending on who you ask. On one side, there are those that will try to convince you that buying is the way to go. No matter the circumstance, buying gives you more freedom. While on the other side, you have people afraid of commitment, arguing that buying is a big investment and that renting comes with a lot of flexibility and an attractive living option to the nomadic soul.
There is a good amount of legitimate reasons to either rent or buy, and that all depends on your unique circumstances. Evaluating your current needs, goals and financial capacity can help you in your decision-making process. Once you’ve determined what those are and where you want to be, you can decide which makes more sense for you.
Let’s start with the pro’s to renting. With renting, if you’re not happy with where you live, once your lease is up, you can easily just pick up and move on. Do you see your job or lifestyle changing in the near to far future? Well, renting could put you at ease. You aren’t confined to a neighborhood, a time frame or a property that you’re just not sure about. Some financial benefits to renting are that renters don’t have to pay property tax. Renters insurance is far cheaper than homeowner’s insurance and depending on your lease agreement, appliance repairs, lawn maintenance, and any upkeep of the home is the responsibility of the landlord. So, if you’ve got a leak, a simple call to your landlord can fix it.
Now, here is the case for owning. Financially, if you have the means to buying a house, equity is one of the top reasons to. Equity is where most homeowners build their wealth. It represents the amount or value of your home that you own, instead of what you owe. And as your home increases in value, so does you equity. Another reason to buy a home is that you get a fixed rate mortgage. You never have to worry about your monthly payment increasing. You can lock in your mortgage payment and know exactly what you will be paying for for the next 30 years. Lastly, owning a home comes with tax benefits. From deducting mortgage interest to a tax break on selling your home, depending on the cost.
The last case to make on homeownership is that you can do whatever you want with it. You don’t have to go through a landlord to ask permission to paint walls or to remodel an outdated bathroom. You are the landlord, you can to whatever you please. You name it – you can renovate or redecorate to your heart’s desire. You’re also in charge of who resides in your home. A spouse, roommate, a family member, or the nine cats you found at the adoption center. You can even rent out a room and make a little extra money on the side. Your house, your rules.
So, as you can see there are many benefits to renting or buying. It all really comes down to your needs. What are you ready for? What can you afford? Here are some pointers to help steer you in the right direction:
You might be a renter if:
- You want a new change of scenery from time to time
- You’re not sure where you want to live or if you want to settle down
- You have bad credit
- You don’t want to be responsible for repairs and maintenance
You might be a buyer if:
- You’re ready to settle down
- You have good credit
- You have a good amount saved to put on a down payment
- You have good job security
Now, are you a renter or a buyer?