Buying a home is one of the biggest investments and decisions you can make in life. Looking at your own situation and determining which advantages are most important to you is how to make the best choice. Having a grasp on the disadvantages of each may also help locking in your decision.
So in order for you to make a wise choice, we’ve put together some key pros and cons of renting a place or buying your own.
The Perks of Purchasing
Buying a home is something that should not be taken lightly. This is why it’s important to know what advantages lie within becoming a homeowner. First, being a homeowner means that the property is yours. Therefore, you will have the freedom to do as you please with the property and also have the advantages of gaining equity on your investment over time.
Not only does a homeowner receive tax advantages but you’ll also have far fewer restrictions compared to a renter such as having pets, ability to decorate, and so on. Another food for thought is that buying a home is actually seen as a method of “forced savings.” This is due to the fact that as you continually pay on your mortgage and as time goes on, you are gaining equity on the property.
The Downside of Home Ownership
Some factors you should also consider when buying a home are the added costs that are required. These additional expenses can include taxes, home insurance, maintenance, repairs, and possibly homeowners association fees. Not to mention the fees that are accrued when first purchasing a home such as closing costs, inspection fees, and more.
You also have less flexibility when owning your home when it comes to relocating. It is said that you should remain in a home for at least three years when buying to at least break-even on your expenses. There’s also more responsibility involved. When your roof leaks or your AC unit breaks, you can’t pick up the phone to call your landlord as these issues will now be in your hands to resolve.
Lastly, it’s important to consider the real estate market. Depending on what time you buy your home and later want to sell it, you need to understand the ongoing fluctuations that occur. You may purchase your home at a time where houses are selling for more but in a few years, it’s possible to see a decline in the market where your home may not be worth as much.
The Upside of Renting
It’s not uncommon to see individuals opting to rent and it’s for good reason. When it comes to costs, you are likely to be able to budget a bit better when renting and are also likely to spend less. Renting requires you to pay your monthly rent, renter’s insurance, and possibly some utility bills. Not to mention the initial costs of renting are usually minimal as renters are usually expected to pay for your first month’s rent and a matching security deposit.
If repairs and maintenance aren’t your thing, renting is your best choice as these duties will lie in your landlords hands. You can also expect more freedom when it comes to the ability to relocate as most renter’s are only locked into yearly leases.
The Disadvantages of Being a Renter
Renting obviously has its downsides, as well. One thing to consider is that your ongoing investments of rent payments will not be gaining you equity along the way as it would when buying your own home.
You’ll also have more restrictions in a rental property as it’s the landlord’s property and therefore, they get to make the rules. So if they say no pets allowed, they typically mean it. Another factor to consider is that the landlord also has the ability to increase the rent as they please. Although, they will need to give you an advanced notice when doing so just know it can possibly occur.
What Should You Do?
So the next time you ask yourself, “Should I rent or buy a house” simply put all of these pros and cons into consideration to determine which option is best for you. Some factors may be a make or break deal for you but don’t forget that there are plenty of options out there. If one home or rental property isn’t the perfect fit, it doesn’t mean there’s not one out there that isn’t.
Further Reading
Government Help for Wannabe Homeowners
Tips for Buying your Dream Home
Can you Afford to Buy Your Own Home?