Rent vs. Buy: Finding the Right Home for You
Without a doubt, one of the biggest debates when it comes to real estate is whether it is better to rent or buy a home. The reality of the situation is that there are both positive and negative aspects of both decisions and that when it comes down to it, the perspective buyer needs to decide what is best for their personal situation.
Renting a Home
Renting is a great option for people that are breaking out on their own for the first time. For many renting is a step towards buying a home, and when the price is right, can be ideal for those looking to save up for a down payment.
Benefits to Renting a Home
-Someone else is responsible for the major upkeep, renovations, and repairs
-It is easier to receive approval to rent a property than a mortgage
-Varying lease lengths allow for more mobility and opportunity to move should the situation arise
-No big down payment
-No real estate taxes to worry about
-Insurance costs are lower for tenants in comparison to homeowners
-There are no varying costs associated with the bills or upkeep of the property
Drawbacks to Renting a Home
-You are helping to pay someone Else’s mortgage
-Tenants are generally not allowed to make any major changes to the appearance of the property
-Your landlord receives all tax breaks and deductions related to the property
-At the end of the day, you do not end up making any equity
Buying a Home
Buying a home is something that most people strive to do, however, depending on where you live, your financial situation, your credit history, and a multitude of other factors, doing so can be incredibly difficult to achieve.
Benefits to Buying a Home
-Although it might take awhile as time goes on your monthly mortgage payments will decrease, and your equity will increase.
-Owning your home means that you have the freedom to remodel, change, and renovate as you see fit
-There are a number of potential tax breaks that go along with owning your home.
Drawbacks to Buying a Home
-Costs and bills vary from month to month
-You are responsible for paying for any maintenance that needs to be done
-You are responsible for all real estate taxes associated with your property
-In order to move, you generally, need to have sold your home
-A large down payment is required upon purchase (often between 5% and 20%)
When it comes to the question of whether you should rent or buy, it depends on what you are looking for, and where you see yourself in the next 5, 10, or even 20 years. Are you planning on travelling the most of the next five years? If so, perhaps buying a house now is not the best plan. Are you planning on settling down in the next few years, and starting a family? If so, deciding where you could see yourself doing so, and saving for a down payment is a great place to start.
Although there is a great debate regarding this topic, the reality is that both can be excellent options, it just depends on where you see your life going.