When it comes to the buying vs. renting debate, sometimes it can be quite pointless. What you really need to figure out is what you want and what works best for YOU!! For years, Americans have marketed the idea of buying a home for decades, and once the housing market crashed, many people realized buying a home is probably not the best idea. Each choice has their perks and their drawbacks, but what matters is how either will work in your favor!
Since realizing that everyone’s situations are different and each person will benefit differently from buying or renting, we’ve decided to just tell you about each, and let you decide for yourself!
We will start with the benefits of both buying vs. renting, allowing you to determine how each will benefit you in your situation/life.
The list of pros for renting a home/apartment is a hefty one! But a lot of people prefer to have these perks instead of owning their own home.
- You don’t have to pay taxes, interest, PMI, etc.
- You don’t have to pay for repairs, leaks, etc.
- Some bills such as water, electricity, utilities, is included in the rent
- Flexibility: You have the choice to pick up and leave whenever you want
- No massive down payment to move in
These are just some of the perks of renting a home. In order to know whether renting is right for you, you’ll want to take a look at your future, your expenses, your goals, and what you’re willing and not willing to pay for at the moment!
- Privacy: as a home owner, you can pretty much do whatever you want in and with your home. You do not have to ask a landlord to do anything
- Potential ROI: After the 2008 housing market crash, this one is a bit of a touchy subject. It is most definitely possible to buy a home and sell it for more money down the road, but it’s not a guarantee.
- Predictable costs:As a renter, your rent and bills can fluctuate, with a mortgage, it is usually a fixed – rate that you can expect to see each and every month.
- Tax deductions
- Equity buildup
Buying a home definitely has it’s advantages. One of the biggest attractions to purchasing a home is the equity buildup, this is almost like a second savings account that you can use whenever need be, but keep in mind this isn’t always the best idea. Another big reason people buy is the Tax deductions. As a homeowner who claims homestead, you can receive up to $50,000 in tax deductions on your property, not included many other benefits of being a home owner.
Anything and everything comes with it’s disadvantages, and that includes both buying and renting!
- No tax deductions or incentives: This may not be a big deal to some, but homeowners receive a lot of tax incentives that can really help out in cases of an emergency
- You do not build equity in a rental home: All the money you pay for rent doesn’t go towards paying down your mortgage or building equity, it goes straight into the landlords pocket. You are essentially paying for someone else to own a home and get cashflow from owning it
- You must follow more rules/guidelines: Sometimes landlords will have rules against certain vehicles, pets, guests, etc. and this can seriously interfere with your life if you have strict landlord
- Cannot always make the changes you want to make to a home: You will always have to consult your landlord or property management company if you want to do anything to your home.
- No fixed housing costs; the rent is likely going to keep going up each year
- Higher Up-front costs: At the very least, you will have to put down around 3.5%, which can be a lot depending on the purchase price of your home
- Less flexibility: if you got offered a job in a different city, it is way harder to get up and move than it would be if you were renting. Plus you’re stuck in a mortgage until you sell or pay it off
- Maintenance and repair costs: Unfortunately as a homeowner, you don’t have a landlord to call when your sink breaks, all maintenance and repairs come out of your pocket
- Taxes: While you do qualify for tax incentives and deductions, you will have to pay your property taxes and HOA fees if applicable to your home. When renting, these charges are rolled in with your rent
- Foreclosure: If you don’t pay your rent, you may get kicked out or just a slap on the wrist. If you don’t pay on your mortgage and taxes, you will be put under foreclosure and lose your home, and it will seriously hurt your credit and ability to get another home in the future.
As we said earlier in the article, buying vs renting is a big debate. It is not a debate that has a definite winner though. It is always in your best interest to sit down and analyze your needs, wants, and situation before deciding whether to buy a home or to just rent! We hope this information has been helpful for you, we wish you the best in whatever you decide is best for you and your family! As always, if you decide to buy a home, please reach out to the Brown home Group at 321-348-8720, and we will make sure you find the home of your dreams!!!
Written by Brown Home Group