Is Renting Better than Buying?
The debate rages on as to whether renting is better than buying. With numerous advantages and disadvantages to each, there is no clear-cut answer. However, the following tips may be helpful in considering the dilemma.
Renting advantages:
Flexibility.
If you don’t like the place you’re at, you can give a reasonable notice in keeping with the lease and move out. Renting options may range from a one-bedroom studio apartment or loft to a full house or multi-acre property.
Freedom.
A long-term commitment is not necessary, which allows for versatility in trying out different living arrangements. Relocating for a job, joining the military, or traveling abroad mean that a rental home will not be a hindrance. You may be able to sub-let a rental if circumstances warrant.
Affordability.
Although this may differ in various parts of the country, monthly rent payments are often cheaper than a mortgage payment. Renting does not require a down payment, although a security deposit is typically required. Supplemental fees like insurance and taxes are unnecessary, although some people take out a renter’s insurance policy. Most maintenance and repair costs are paid by the landlord, or property owner.
Renting disadvantages:
Renting does not build equity. Renters do not receive any funds back when they move. Rental fees is money gone forever with no return on investment except time spent living there.
Buying advantages:
Buying a home provides security, knowing that the residence will remain permanent unless circumstances are altered, such as losing a job and being unable to make the monthly payment.
Buying a home builds equity in the property. After a few years if you decide to move and sell the house, you can probably earn a profit. Home equity lines of credit may be available as the house principal is paid down, freeing up money to borrow as credit.
Some people like the idea of staying put for years to come. They want to put down roots and call the house their home. Using sweat equity and money, they fund projects to improve the place and make it more their own so that it represents their interests and style.
Buying disadvantages:
When you buy a home, it is not always easy to sell it. Markets can change, buyers may be scarce, and the property could at least temporarily lose value. Needing to move on short notice due to a job change or a divorce, for example, could cause problems.
Owning a home is not cheap. Immediate repairs or upgrades may be needed when you move in. Maintenance of plumbing, electric, heat and air conditioning must be financed, along with lawn care and other costs, such as painting, replacing light fixtures, or a new roof. Some of these can be planned, while others hit out of the blue. Taxes, insurance, and utilities are all paid by the home buyer, as well as interest on a mortgage loan.
Some properties appreciate in value, while others decline. There is often no way to predict which way they will go. Homeowners may be unable to sell a house with decreased value.Whether buying or renting, give some thought to these considerations, and others.