Buying VS Renting: Which is Best?

Most people’s ultimate dream is to own a home they can call theirs, but the market is proving to be more difficult than it was 10 years ago. As a result, many are renting instead of buying as they wait for rates to lower. But is the cost of renting in the meantime really worth it?


Here are the pros and cons of renting and buying right now:


Pros of Buying A Home


  1. You build equity. Every penny you put towards the principal of your home is money you get back when you sell your home.


  1. An excellent long-term investment. In addition to the money you can get back from the sale of your house from the principal, your home gains value every year. Throughout 10, 15, or even 20 years that can come up to a lot of extra cash in your pocket once you sell.


  1. It’s yours to renovate. You don’t need any landlord’s permission to renovate or redesign anything in your home. You own the property so you call the shots.


Cons of Buying a Home


  1. Cost of maintenance. When unexpected repairs or maintenance costs pop up, you have to foot the bill as you own the property.


  1. Less mobility. If you have a new opportunity across the country, it’s not as easy to pack up your bags and leave. You’re at the mercy of the current market when it comes to how long it may take to sell your home.


  1. Increased monthly payments if interest rates go up. Your interest rates are locked in for a specific term only. Afterward, you’re at the mercy of the current interest rates.


Pros of Renting 


  1. Flexibility. Your lease can only keep you in that place for a certain amount of time. Plus, most people can break their lease with a payout. This gives you a certain type of flexibility that owning property does not.


  1. Little to no maintenance and repair costs. Whatever needs to be fixed, your landlord is the one that will have to take care of it.


  1. Stable monthly payment. When you sign your lease, your monthly rent is stable throughout the whole lease. 


Cons of Renting


  1. You don’t build equity. When you’re paying rent, you’re paying off the landlord’s mortgage.


  1. Possibility of your lease not renewing next year. If your landlord decides to renovate the unit or move in with one of their parents at the end of your lease, you don’t have a choice but to move out. 


  1. No tax incentives. Unlike interest on mortgage payments, the amount of money you put toward your rent can’t be credited when tax season comes. 


As you can see, there are pros and cons to both scenarios. However, if you want to set yourself up for the future, then buying your home is a better option for you as it gains value over time.

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