Buying A Home vs. Renting A Home | Which is best for you?
Debating between renting or buying is a major decision and there are pros and cons with each option. The answer to the rent vs. buy debate isn’t always so black and white. There is a lot to consider before deciding whether to rent or buy. This decision does not just affect how much money you have left at the end of the month. It also affects your lifestyle and the size of your savings you are able to accumulate over the years.
Benefits of Owning A Home
A home is likely one of the largest investments you’ll make in your lifetime, and as you pay off your mortgage, you’ll begin to gain equity in the property. The more equity you build in your home, the greater your total assets are, which can help you later on. You’ll also receive a tax break as a first-time homeowner.
Additionally, If you choose to buy a home, it’s yours to do what you want with it. You can paint it, replace the cabinets, add on a room, build a pool, and fully customize the space to your style and aesthetic.
Key Points to Consider:
- Will you be in the home long enough to see a return on your investment?
- Homeownership comes along with a few intangible benefits. They include belonging to a community, a sense of stability, the pride of ownership.
- You build equity as a homeowner
- Buying can tie your liquid cash up for years to come
Benefits of Renting A Home
As a tenant, you have the freedom of not having to worry about maintenance and any surprise repair costs. While minor repairs may be your responsibility such as patching up a nail hole in the wall, the overall maintenance is not, which most people on a limited budget can really appreciate. While renting; you also have the flexibility to leave when you need or want to. When your lease is up, you can leave with no worries and you have the freedom to move to a newer complex or even a new country if that is what you desire.
Key Points to Consider:
- Renting offers a lot of flexibility, predictable monthly expenses, and takes away the hassle of maintenance.
- The biggest pro of renting can also be a con – It’s temporary
- You don’t build equity as a renter
- Renting may free up your disposable income
Related Post: Five Mistakes to Avoid as a First Time Home Buyer
If you look at monthly costs alone renting and buying may not seem that different. But, homeownership often tips the money scale because you pay for maintenance, taxes and homeowner’s insurance on top of your mortgage payment. Long-term costs, however, paint a different picture. If you move every few years, renting is probably the cheaper option. But if you plan on staying put for the long haul, you will very likely get a better deal when buying—especially once you finish paying off your home. In the end the choice depends on a number of factors, all of which will be different for each person. Before making the decision between renting and buying you should weigh all of the options, consider your lifestyle, your finances and overall life plan.