In the past, owning a home was always the better option for most people. However, due to the economic recession, more and more people now prefer renting over ownership. When home prices drop, many homeowners find themselves struggling to pay their mortgages. On the other hand, paying for monthly home rent can be a stressful. It is a frequent expense that has a huge impact on your financial situation and you don’t get any asset under your name.
In order to you to determine whether you should rent or buy your home, be sure to catch up on the latest real estate news and consider all the pros and cons of renting versus owning to help you make an informed decision.
Advantages of Renting
- Lower upfront costs: When buying a home, it requires a potential homeowner to pay a huge down payment for the house, including several property costs such as home inspection and closing expenses. Unlike owning, renting would require you to pay only the first and last rental payment along with a security deposit. Renters don’t have to incur any extra costs, such as home inspection, maintenance costs and so on. This will allow the renter to save a significant amount of money. Renting also gives you freedom and flexibility that you need to consider different properties and locations without having to commit to a particular neighborhood.
- Changing Career/Job: when you need to change careers or jobs within a short period of time, renting a home is a better option. If you plan to move or relocate to a different area or city due to a job change, you don’t have to worry about other costs relating to the home you are currently living in.
- An opportunity to improve your credit score: by establishing a history of timely rental payments, you can be able to create a good credit score.
- No maintenance: when you are faced with a home maintenance issue, you don’t hire a repairman; instead you simply need to call the landlord.
- Additional expenses: sometimes, the landlord may cater for common utilities, such as water, heat, hot water, garbage and sewer, among others.
Disadvantages of Renting
- Renting typically limits you to beautifying your own home.
- You Are required to stick to your landlord rules.
- You have no control over changes in rental payments.
- No equity is established on the home whenever you make your rental payments.
Advantages of Buying
- Builds Equity: whenever you pay your home mortgage, you boost your level of ownership with the property in question. Owning your home can also allow you to refinance the property and use good rates to fund future purchases.
- Tax Deductions: owning a home can also give you an opportunity to enjoy tax deductions or low mortgage interest.
- Have control over your home design: unlike renting, owning gives you complete control over your home’s interior and exterior design.
- Maintenance options: unlike renting, owning your home allows you to carry out renovation or remodeling work on your own. You may also call a contractor to do the job for you.
- Pride of home Ownership: owning a home is still the dream of many, and once you buy a home, you become a proud homeowner.
Disadvantages of Buying
Many financial experts agree that owning a home is a longterm investment. In other words, as the dynamic real estate market keeps on changing, the prices of homes are likely to keep on fluctuating.
That’s why it’s advisable to always catch up on the latest real estate news and market trends.
At the end of the day, determining whether to rent or buy a home all revolves around one thing: your long-term financial situation.