The Pros and Cons of Buying vs. Renting
Buying a home is likely the biggest investment a person will make in their lifetime. It’s an exciting decision to make and yet there are many things to consider before taking the leap. Depending on your lifestyle and long term goals, buying a home as soon as possible may make the most sense. For others, renting may be the better or only choice, at least for now.
Here are the general pros and cons of buying vs. renting:
Buying Pros:
-No more rent! The money you put towards your monthly mortgage payments is at least partly direct equity in your home. This puts you a more stable and more flexible financial position for future purchases.
-Creative freedom! You can paint the walls any color, add a gorgeous light fixture, re-tile the bathroom or even renovate entirely if you so desire.
-Tax breaks! As a homeowner, you can write off your interest payments and certain other home related expenses.
-Settling down! Owning your own home instills a sense of grounding within your surrounding environment. Get to know your neighbors and become a part of a larger community!
Buying Cons:
-Initially purchasing a home is very expensive. In addition to your down payment, there are some smaller but still significant fees to consider including earnest money, appraisal and inspection costs, property taxes, insurance and closing costs to pay your lender and realtor.
-Less flexibility. While of course you can always sell your home if you decide to move, consider that you may want to hold onto it for at least two if not five years to retain some equity and receive a return on your investment.
-There is the possibility of larger expenses surfacing unexpectedly. All major repairs will come out of your own pocket as well as utilities and any other regular maintenance or upkeep.
Renting Pros:
-More flexibility! If you aren’t sure yet what neighborhood you want to live in or you aren’t sure if you want a house or condo you have the flexibility to try out different scenarios and see what fits your lifestyle the best. You can always pick up and move cities, states, or even countries fairly easily.
-You aren’t responsible for large repairs, renovations or appliance replacements. It is also likely that your lawn maintenance, your trash, and a least a portion of your utilities are covered by your landlord or already lumped into your monthly rent.
-Renting requires less money up front and it is usually easier to qualify for if you have poor credit.
Renting Cons:
-No equity. Your rent is money you will not see again.
-There is limited opportunity to personalize your living space.
-We can all admit it, moving sucks! If you do love where you live it is up to the whim of your landlord whether or not you are able to stay after your lease term has ended. Moving when you don’t really want to move is the worst.
We hope you take these comparisons into serious consideration when making your next move in real estate. It’s always a good idea to invest, especially in real estate, but it is an important purchase to make at the right time, for the right reasons, and when you’ve found the right house. Until then, rent. Either way, Corken + Company offers real estate solutions without limits and is always here to help!
