Should You Rent or Buy

There are many factors that determine if renting or buying a home is the best option for you. Your age, job stability, family status, financial abilities, as well as many other variables come into play when deciding to rent or purchase a house. Some of the questions you may want to ask yourself include: how long do you plan to stay in your next home, are you handy and capable of making minor repairs, and do you have the financial wherewithal to purchase a property. The following list of advantages and disadvantages may help you decide which option is the best for you.

Advantages of Buying

1. Appreciation – Hopefully, over time your house will become more valuable. Eventually when you sell the property you should make a profit.

2. Building Equity- As you make your mortgage payments you will be paying down your principal balance of your mortgage overtime, which will likely result in great equity in the property.

3. Tax Benefits- Homeowners qualify for many tax benefits, such as: deducting mortgage interest, and home deductions for self-employed individuals.

4. Freedom- Homeownership will allow you to decide how to improve your house and when to improve your house. You could choose the color of the paint, type of carpet, or any home improvement. You do not have to get permission from the landlord. You can update bathrooms, kitchen, basement, or build it deck as long as it meets city codes and ordinances.

5. Permanence – Homeownership will give you a sense of pride in your community, which often leads to new friends and groups that you may align yourself with.

Advantages of Renting

1. Initial Costs- When purchasing a property there are initial costs, such as: down payment, closing costs, prepaid expenses, and other fees that are associated with homeownership. With renting, usually one month’s rent is accepted for the security deposit.

2. Opportunity Costs- What could you do with the money you used for your down payment and closing costs if you rent instead.

3. Ease of Relocation – Once your lease agreement expires, you can move at any time with no fear of repercussions.

To determine which is the best option for your situation, you may want to create a list of advantages and disadvantages and decide for yourself which choice is best for you. Does it make sense for you to purchase? How much would it cost to rent the property as compared to purchase the property? Do you plan to stay in the community long-term or do you plan to move to different area in the future? Could your employer transfer your job to another city or country? Are you financially ready to purchase a property, do you have a down payment saved? Are you emotionally ready purchasing a home? Are you comfortable with the neighborhood; do you see yourself being able to stay there long-term? Are you able to complete small home maintenance items yourself? Are you committed to maintaining your house, such as: cutting the grass, cleaning gutters, shoveling snow, and sealing the deck?

Is purchasing a house or renting a better option for you. Everyone’s situation is different depending on many factors, hopefully the above information will help you evaluate what is the best decision for your situation.