The choice between buying a home and renting one is among the biggest financial decisions you will make -- one that greatly affects your lifestyle and financial situation. Some people buy a home to plant roots in a community or make an investment while others rent for the flexibility or minimal responsibilities. But owning doesn’t always make more financial sense than renting, nor is renting always simpler than owning. Consider the pros and cons of each to figure out whether renting or owning is best for you.
THE PROS OF BUYING A HOME
Every monthly mortgage payment brings you one step closer to owning the home free and clear. When you pay your rent, that money is spent and you'll never get anything back in return. But when you pay your mortgage, you work toward full ownership.
You can reap the benefits of appreciation. Your home will most likely increase in value over time depending on the market and how well you take care of it.
There are tax advantages. Many of the costs of owning a home, such as property taxes and mortgage interest, are tax deductible, meaning that this amount is deducted from your income, helping you to pay less taxes.
You can make your own renovations. As the owner of your home, you can make any structural or cosmetic changes that you want. And most changes will add value to your home.
You have more privacy. Having your own home means no shared walls or common areas, and no cramped apartment. You can enjoy privacy and relaxation in your own backyard.
THE CONS OF BUYING A HOME
You have additional expenses. Expenses include homeowner's insurance, flood insurance, property taxes and utility bills.
You have to do your own maintenance. If something breaks, you can't call your landlord to fix it. As a homeowner, you’re responsible for the upkeep of your home.
THE PROS OF RENTING
You have more flexibility to move. If you're unsure whether you want to stay in your current location for the long run, it's simple enough to move at the end of your lease without having to worry about selling a home first. It's also much easier to get out of a lease than a mortgage.
You don’t have to pay for maintenance. The landlord is responsible for fixing almost anything that goes wrong so you don't have to worry about surprise repair costs.
THE CONS OF RENTING
Rent rates will increase. Unless you find a rent-stabilized apartment, chances are your rent will increase year after year.
You have less freedom to renovate. While your landlord may allow you to paint a few walls, you're probably not going to be able to make many changes to your home or apartment.
You have no financial incentives. You do not get the benefit of tax deductions, increase in equity or appreciation in property values. Years of renting can get very expensive, and it's money you'll never see again!
Deciding whether renting or buying is best for you isn't any easy choice. So, we're here to help you navigate your options. If you'd like to speak with us about your decision, reach out to us today.
We're not your typical real estate agents.As former city dwellers, we appreciate the qualities that make city lifestyle so unique, from the convenience of walking to your favorite restaurant or corner store to the vast and diverse cultural and entertainment activities. But we’ve also experienced the challenges and frustrations that are motivating you to seek change. During our transition from the city to the suburbs, we had the same thoughts, concerns and questions, prompting us to create a better way to navigate the suburban home buying journey for others.