Weigh the pros/cons of owning and renting to make an informed decision
When choosing between renting or buying, you need to consider all of your options. Are you looking to settle down and start a family or are you moving after a couple years? Can you afford to invest and buy a house or are you investing your money elsewhere?
Here is a helpful list to help determine if renting or buying is best for you.
Pros of buying:
- You can build equity, which is the difference between what you owe on the home and what it is worth. Over time you’ll have actual full ownership of your house or apartment.
- You’re eligible for tax benefits, such as homestead exemption and federal tax deductions. Consult your accountant or other tax adviser on this one.
- When settling down and buying a home you’ll be able to be part of a community.
- If circumstances change you may use your home as an investment, like renting it out.
- Freedom to renovate, update or customize your house to match your lifestyle and design needs.
Cons of buying:
- Potential to lose money on the house, if the value of your home decreases or remains the same. Building equity over time isn’t equivalent to automatic profit.
- You’re responsible for paying for the repairs and maintenance of your home.
- The initial costs of purchasing a house (upfront and closing costs) can be high. You have to provide your first payment, homeowners insurance, home appraisal, etc.
- Less freedom to pack up and move whenever you please.
Pros of renting:
- You aren’t responsible for repairs or maintenance of the apartment or house.
- The cost of some utilities may be included in your total rent.
- Relocating is easy because you’re not tied to a mortgage or any other housing-related financial responsibilities.
- Credit requirements for application approval are usually less strict than mortgage applications because the credit-check process is only based on your credit history and credit score.
Cons of renting:
- There is no equity building on the place you are renting. This means the money you are paying is going nowhere and you own 0% of the place you are renting.
- You’re not entitled to federal credits or deductions related to housing because you don’t own the house or apartment.
- Your landlord or superintendent has the right to increase your rent payments after the lease expires to match rent in the housing market.
If buying a house is the best option for you and you want additional information on mortgages, loans, etc. get in touch with us at 1-844-77-vLoan to get started today.