Renting vs Owning – The Big Debate
There comes a time in everyone’s life where they have to make the ultimate decision and decide whether to buy and own their own home or continue to rent. It’s a huge decision as both have notable benefits and disadvantages and it is not one to be taken lightly. So lets have a look at these advantages and disadvantages to see which option is really the best option for you.
Owning your own home is the traditional dream that practically everyone has, especially when it comes to starting a family. It gives you a feeling that you have accomplished one of your goals and that you are both financially and emotionally secure as well as giving you a great sense of community. But is it the right decision for you? Lets have a quick look at the advantages and disadvantages of buying and owning your own home.
- Set your own rules
- Sense of security
- A home is a great investment (long term, not for a quick turnaround, especially in todays market)
- Get various sort of tax rebates and deductions
- Repayment is usually the same or even lower than it would cost to rent – see example of my rent vs own comparison
- You build equiry over time
- Improve your credit score if you need a loan in the future
- You are liable for any accidents and injuries on your property
- You are liable for any damage to your neighbors house if stemmed from your property – for example a tree branch falling over the fence and damaging something in your neighbors yard.
- Responsible for any maintenance in, on, or around your home
- No longer can you just pack up your things and leave when you want. You’ll need to list and sell your home
- Large loan responsibility even if you are having financial hardship
- Required to have homeowners insurance to cover damages to the property
- Responsible for property taxes
- Requires an upfront down payment (VA and USDA are 100% financing products, if you qualify)
Renting is something most of us start out doing and many people are comfortable doing it all their lives. There are many advantages to renting a home but there are also a few disadvantages. Let’s have a look at them.
- You can up and leave as soon as your lease it up
- If you run into a financial hardship, you can move again
- Little or no responsibility for maintenance
- Sometimes utilities are included in the rent cost
- Sometimes you have free use of amenities such as laundry, pool, and other sorts of actualities
- Limited or no freedom to what you can do with the place (paint, design, build, etc)
- Rent MAY increase
- No tax deductions
- At risk of being evicted
- The house could be sold and you can be asked to leave
- Could have restrictions on certain things like noise and pets
- Could have restrictions on the number of members living in the house/apartment
- Rent is not going into a productive investment for you
As you can see clearly there are many advantages and disadvantages to owning your own home and renting. Some have advantages and disadvantages the other doesn’t have, but both can be a comfortable way to live. When it really comes down to it you have to choose the one that suits you’re financial, emotional and lifestyle needs at this time. You have to take your future into account as well, will you want to be tied down and take responsibility for a huge investment or will you prefer the freeness of being able to move whenever you please? It can be quite a hard decision to make and it is one that needs a lot of time and thought before you proceed to take any further steps.
When you call me, I take the time to evaluate your current financial status and together we can compare the pros and cons to owning a home. In addition, I take the time to complete a Total Cost Analysis. Together, we will find the program that works best for you and your family.