Should I rent or buy? This is a question housing experts receive often. Because of the varied complications and pricing that comes with buying a house, the answer isn’t exactly set in stone. It can be difficult for the average buyer to decipher which is a better deal. It’s important to realize that the buyer’s personal situation is a huge deciding factor in whether to buy or rent, so do your research based on your own position. However, like any other decision, there are pros and cons for both sides.
On the side of buying, owning your own home is a great financial decision, even if it doesn’t seem like it up front. You’ll have an advantage when it comes to equity and security, and your home will serve as an asset for you financially. You’ll always be able to sell your house, and depending on the work you’ve put into it, possibly for much more than you originally bought it for. In general, homes tend to appreciate over time, so you’re likely to earn a profit off the sale. However, depending on the interest rates for the area and other external factors, this isn’t necessarily a guarantee.
Another pro for owning your home is the freedom that comes in making your own decisions. There is no landlord to decide what color you can paint your walls or whether you can replace the cabinets in your kitchen. Additionally, if you are consistent with your payments, being a homeowner can improve your credit score.
Again, there are some potential downsides. Buying a home is not cheap, and down payments are required. Additionally, unlike renting a home, you are responsible for many fees such as taxes and insurance, as well as any and all maintenance needs or possible damages.
As for renting, you are allowed more flexibility, and it isn’t as big of a commitment as purchasing a home. If you move around for your job or don’t want to settle in one spot for an extended period, renting might be a smarter option for you. Unlike owning a home, once you’re ready to move out, there is no stress on the buyer to find a replacement tenant. Plus, renting often allows people to live in a nicer area than they could afford otherwise.
What’s more, you are free of the burden that comes along with caring for maintenance, damage and other fees that homeowners are responsible for. This can save you money for sure!
While renting offers mobility, it does restrict your freedom when it comes to renovation and other design decisions. You must ask the homeowner for permission before making any kind of changes. Most notably, one of the downsides to renting is the fact that there is no return on your investment. Though the payments are less expensive, instead of working towards owning a property that you can turn around and sell, you’re simply paying money to the renter.
So, when choosing whether to rent or buy, consider your situation. Most importantly, how long you’re looking to stay in your home and your financial goals. There are plenty of great online calculators that allow you to plug in specific numbers, along with the number of years you’re looking to stay, so you can get a clear look at the difference between your options.
Furthermore, talk to a housing agent that you trust, and ask for their advice. With just a little bit of research, you’re sure to find the perfect housing situation that works for you.