Renting versus buying

Is it better to rent or buy your next home in today’s sea of rising home prices and interest rates? In this article we will help answer questions on Buying versus Renting.

Disadvantages of Renting vs. Buying | Which is Cheaper?

The length of time you plan to stay in the property, your credit score, and your income will play a big role in whether you should rent or buy.

Let’s take a look at some of the advantages and disadvantages of this age-old question: Buy vs. Rent?

Advantages of buying:

There are many benefits of homeownership. Here are some of the advantages of buying:

You get a home all to yourself.
No need to worry about a landlord anymore.
Upgrade and renovate the home as you choose.
You can finally start taking a real pride in your new home.
You will eliminate monthly housing payments once it’s paid off.
If the home appreciates more than you’ve paid in mortgage, interest, taxes, and maintenance over time, you will have equity.
Interest paid is a tax deduction.
Building equity as time goes by is like a savings account.
You can make renovations to customize it to your style.
Payments on the home help to build your credit.
House Payment is generally cheaper than rent in most cases.

Disadvantages of buying:

You’re responsible for all repairs.
Requires a sizable downpayment.
Property taxes, mortgage insurance, homeowners insurance and HOA dues are the homeowner’s responsibility.

Advantages of Renting:

Renting makes much more sense for some people if you are only needing short term housing and plan on moving within a year.
You aren’t responsible for taxes, mortgage insurance, or repairs on the home.
Also, can pick up and leave after lease is up and not have any expenses as you will have in selling a home if you decide to move.

Disadvantages of Renting:

You cannot make changes to the property.
You earn no return on your payments.
Renting normally does not improve your credit.
Homes are normally outdated.
Landlords don’t make cosmetic upgrades while you’re in the home.
Home can be sold while you are renting and you have to move and find another home to rent.

Rent Vs. Buy: Some Final Thoughts

It’s important to note that you need to be realistic about your financial situation when deciding between renting and buying. Once you estimate the costs of renting versus buying, be honest about whether you can afford other upfront costs like a down payment, repairs, moving costs and buying new furniture.

Consider using a mortgage calculator to estimate your monthly payments as well as how much home you can afford. In either case, do some careful budgeting right now so no matter what you choose you’ll be able to afford a home or rent.

There isn’t always a clear answer to the question of whether to rent or buy. Depending on your life situation and finances, the answer might change over time. No matter what decision you make, it’s crucial you make an informed decision based on your financial situation and lifestyle.