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Renting vs. Buying a Home

21 Aug , 2014  

Dog Welcome HomeThere are many important factors to consider when one wants to buy or rent a home. Renting vs. buying a home requires one to make important personal decisions. To assist you make the right decision, here is a guide to the pros and cons of buying vs. renting.

There is a time when renting is best for a person and there are times when buying is best. Maybe you’ve been renting but now you’re ready to buy and you only continue to rent because you think you have no other choice. This is where good information helps you make the best decision.

Let’s compare some pros and cons.

Buying Pros

If you make the decision of buying a home, you are contributing to your investment portfolio and building equity. You can do anything to that home since you will find the enjoyment of living in your own house. It’s yours and you can make decisions about construction, painting, remodeling and more. You can feel confident that you are investing into your future and you have equity. This gives you an additional type of security that you did not have as just a renter.

Buying a house also comes with financial benefits such as a deduction for your mortgage interest. These are just some of the pros of buying vs. renting.

Buying Cons

Perhaps the most difficult thing about buying a home is whether or not you are going to afford the down payment. In some situation it can be around 20% of the property’s price. Other additional costs include homeowner’s insurance, property taxes and general home maintenance.

Renting Pros

Generally, renting does not have many financial strings. You have small costs of rental insurance and your personal style and belongings but most maintenance issues will be handled by the home owner. Renting a home will only require you to pay the security deposit compared to buying that will require you to pay the hefty lump sum down payment. Renting is the best solution if you do not want your money to end up in mortgages. Many people choose to rent when they are not ready to commit to purchasing a home just yet or when they will only be in an area temporarily.

Renting Cons

Your monthly rent may end up being much more expensive than the mortgages after a few years. You could have bought a house by the time you spend a number of years renting. Another downside to renting is that you don’t build any equity. Renting is not an investment. You’re buying a temporary place to stay- that’s it.

Buying vs. renting a home depends on one’s personal decisions since some want the security of owning a house while others prefer the flexibility of renting. It’s not a decision that anyone else can make for you or your family. It’s not about which is better than the other but about which is best for you.

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