Are you better off renting or buying a home?
One of the most frequently asked questions that Jacob receives is “should I rent or should I buy?” There are obvious pros when it comes to buying and some benefits if you’re thinking about renting. However, there are drawbacks to both scenarios, and you should always consider what your long-term real estate goals are, as well as your personal financial situation.
Some things you should think about when you are comparing renting versus buying are:
Renting: there are likely lower monthly costs associated with renting. There might also be fixed monthly costs and you may be asked to pay a deposit for damages.
Buying: when you buy, there are likely higher monthly costs with mortgage (plus interest paid to the bank), property taxes, utilities, maintenance, furnishing and decorating. You will also likely encounter unexpected repair costs over time.
Renting: the rent money you pay goes directly to your landlord.
Buying: you can build equity as you pay off your mortgage, and your property value appreciates over time.
Buying: you can create income by renting out or borrowing against your home or investments.
Renting: as a renter, you are not responsible for maintenance, but dependent on the landlord to make repairs within a reasonable amount of time. This is a very hands-free approach that puts very little responsibility on you.
Buying: as a homeowner, you are responsible for maintenance and repairs. This includes roof, windows, and upkeep, as well as cosmetic updates.
Renting: prime areas may equal higher rent; however, you save time and money on your daily commute.
Buying: Affordable houses in suburban areas could mean a more lengthy and expensive commute.
Flexibility to move
Renting: As a renter, you have the flexibility to move out when your lease is up.
Buying: It may be harder to move quickly, as it can take some time to prepare your home to sell it and wait for it to close.
As the housing market continues to fluctuate, more people are considering renting and putting off buying a home. Moreover, owning a home just doesn’t make sense for everyone. You might be one of those people, or you might be ready to take the plunge. Before you jump at the first home that catches your eye, make sure you ask yourself what kind of housing you’re looking for, how much you can afford, how soon you think you’ll want to move again, and how important home ownership is to you.
For more information on this topic, or for any questions you might have, feel free to contact Jacob today!