One of the biggest decisions most people will make comes down to their home. With the average home costing Americans hundreds of thousands of dollars, and monthly rents throughout the country often being well over $1,000, this decision can be a very financially important one.
Whether you want to rent or buy is a tough decision, but thankfully there are many online resources that can help. For example, sites like https://umovefree.com/ can help potential renters find a number of high-quality rentals at various price ranges. However, which is the better option? Well, that depends. It depends on your finances, your lifestyle, where you live, how much you want to spend and a variety of other things like that.
For example, if you’re not sure where you’re going to live or work in the next year or two, it doesn’t always make sense to buy a home. On the other hand, if you have a stable job, and are tied to a city with a decent market, buying a home often makes more sense.
In an effort to help make things as simple as possible, we’re going to go over a pros and cons list all about renting or buying. Without any further ado, this article will take a closer look at the good and bad when it comes to the renting vs. buying debate.
- Renting is more low maintenance and easy. You are not responsible for any of the repairs (at least most of the time), and can reach out to your landlord to make fixes when necessary. This will not only save you a lot of work, but can also save you a lot of money in the process.
- Renting offers you more flexibility and mobility. You aren’t tied down to a city most of the time, and are free to move quite easily. There is no worry about being able to sell your home before you move, as once your lease is up (or potentially earlier), you’re free to go.
- While rent can be expensive and you might have to cover some utilities, there are less costs involved with renting then buying. When you buy you will be responsible for house insurance, property tax, and many others.
- You have less options when it comes to designing your space when you rent. Many landlords will have specific rules as to what you can change about the apartment. This can limit your freedom when it comes to how you use the space or any renovations you want to make.
- When you purchase a home, it is often seen as an investment, as the home will eventually be paid off and you will own it. However, when paying rent, there is no return on investment and while the money isn’t a waste, it simply isn’t going towards building any wealth.
- When you purchase a home, oftentimes your costs like your mortgage is fixed. This means it is predictable and shouldn’t fluctuate. The same unfortunately can’t be said for rent. Your rent can fluctuate based on the market, inflation or simply what your landlord wants to charge for their space.
- When you buy a home, all of your mortgage payments are an investment towards an asset. After your amortization period ends, you will be a homeowner and have an asset worth hundreds of thousands of dollars, and no longer have to pay a larger mortgage.
- You have a ton more creative control when you buy a home than when you rent it. You are essentially free to make any changes or alterations to the home that you see fit. You can knock out walls, hang as much as you want and remodel the area in any way.
- Another benefit of buying a home is the tax deductions that it provides. You are able to deduct all of the mortgage interest you pay in a given year, which could potentially equal thousands of dollars. You can often deduct property tax as well, and there may be other deductions for properties that generate income.
- The hidden costs of buying and owning a home can be substantial. Insurance, taxes and other costs can add up and can make owning a home much more expensive than simply paying a mortgage. Don’t forget about maintenance, as well, as those costs can reach into the thousands if things go wrong.
- There is often a distinct lack of mobility when you purchase a home. Once you get a home, you are essentially locked into that city in some capacity for many years. If you want to move, you will need to sell or rent out your home, which can be a long process either way.
- While most home values do indeed increase over time, this isn’t always a given. When you own a home, you are very invested and this can be scary if you are in a tough real estate market. Housing markets can often be full of uncertainty, and there is no telling what your home could be worth in a few years, which can negatively affect the peace of mind of some people.
In conclusion, this article should be able to help you decide whether renting or buying makes the most sense for you. Each has their own benefits and drawbacks, and what works for you might not always work for someone else. Be sure to take time to research and find out which is the better option for you and your family.