It’s an age-old question for all when they first set out to look for a home. Should one rent, or should one embark on the journey of buying a house? No matter how many you ask, everyone has an opinion for one or the other. But the truth is a little more substantial than a “this or that”. Thanks to how rent prices, home prices, and interest rates change—there is no “right” answer to the question. In the end, it’s very subjective based on the market and your own financial situation.
Let’s take a look at some of the pros and cons of Buying a House and Renting a Property…
Buying a House: The Pros
Making the big move to buy a house is a significant step in anyone’s life. It’s often a decision to settle down, to start a family, to begin building equity and value. Indeed, your payments towards home ownership do build equity for you, and they may even be tax deductible, further adding some extra financial power back into your pocket every tax season. Furthermore, you’ll have some added stability to your life. So long as you keep up with your payments, you won’t have to worry about having to leave so long as you want to stay!
Homeownership also means you get to make the choices you want about your property. You can add to your home, renovate and remodel it, or even rent it out if you so wish. There is a lot of potential for change as well as for growing wealth when you’re the owner of a home. Furthermore, with the continual rise in rent costs, owning a house just might be cheaper in the long run.
Buying a House: The Cons
Buying a home has a lot of rich benefits, however it is not without its issues. In a faltering market, your home’s value may actually go down (with no telling when its value may rise again). In order to move, you’d have to figure out a way to get your house sold, or deal with the costs of having two homes on your hands. The costs may rise with the added responsibility of having to maintain everything in your home, instead of having a landlord take care of those things.
Depending on your choice of home, you do also have a chance of paying more than what you would with rent. Other costs may be hidden until you finally get the house and discover issues such as repairs or extra renovations that are needed. Then there’s the costs of insurance and taxes, that you might not fully understand until becoming a homeowner.
Buying a house can be rewarding, but you will need to be prepared for the many responsibilities and potential costs of living as a homeowner.
Renting a Property: The Pros
In the meantime, renting a property can provide you with a lot more freedom than homeownership might. Unlike having to take on a 15-year or a 30-year mortgage, a renter usually only takes on 1-year leases with their landlord at a time. What’s more, maintenance of their rental property is managed by the landlord, giving the renter more financial freedom. You even might get lucky enough to have some utilities covered.
Renting a Property: The Cons
In exchange for that much freedom, there comes some costs all the same. As a renter, you can find yourself at the mercy of your landlord should a great change occur such as the landlord wishing to sell the property which you have rented. Furthermore, you cannot make any major changes to your rental like you could for your own home without the landlord’s approval—something the landlord might forbid from the start. Landlords may also create other restrictions and limitations on things such as pet policies.
For those caring about future finances—renting also means no building of home equity. None of your payments go towards anything except the landlord’s interests. You don’t even get tax benefits for your rental payments.
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