buying versus renting

02 Feb

Pros and Cons of Buying Versus Renting

Determining whether to buy a home or rent can be a tough decision with many factors at play. Would a mortgage really be cheaper than rent? Would it be a better to settle into a home or remain mobile with an apartment? These are a few questions to ask yourself when weighing the pros and cons of buying versus renting.

The Pros of Buying a Home

  • More Autonomy: You have more creative freedom with a purchased home than a rented apartment to remodel, make changes, paint and even hang pictures and other decor.

 

  • Build Equity Over Time: The money you pay each month builds your equity and ownership over time.

 

  • Investment Property Potential: You can make improvements and sell the property later on for a profit, or you could rent it out and generate an income.

 

  • Mortgage Payoff: Unlike renting, where you pay rent for the entire tenure of your stay, buying a house means there’s an end in sight. You won’t keep paying forever, and eventually you’ll own the home completely.

 

The Cons of Buying a Home

 

  • Restricted Flexibility: It’s harder to up-and-move if your circumstances change.

 

  • Additional Homeowners Costs: There are property taxes, homeowners association dues, maintenance costs, etc.

 

  • Large Up-Front Costs: The initial investment can be much higher than the cost of renting, with closing costs, earnest money, inspection costs and more adding up.

 

  • More Work: With a home, you’re in charge of doing the upkeeps and maintenance around the house, or paying someone who can.

 

  • Could Lose Value: Your home could depreciate in value over time, depending on its location and the amount of care and maintenance you put into the home.

 

The Pros of Renting

 

  • Maintenance is Included: If your water heater bursts or your refrigerator dies, all you have to do is call your landlord to get things fixed.

 

  • Predictable Payments: You know what living in your apartment will cost you each month for the tenure of your lease. No hidden costs or surprises.

 

  • Relocation Flexibility: You remain relatively flexible in your freedom to move if needed. Many landlords allow for a 30 day notice and will keep your initial deposit if you decide to break the lease.

 

  • No Depreciation Risks: The value of your apartment may fluctuate, but that’s not your problem – it’s your landlord’s. Your rent won’t rise for the tenure of your lease.

 

  • Amenities Included: Pool access, a gym and commons area? Yes, please.

 

The Cons of Renting

 

  • No Ownership: You’re paying every month, but that money isn’t turning into ownership. You’ll never see it again.

 

  • Up-Front Costs: Many apartments require a deposit as well as first month’s rent – a sizeable chunk of funds.

 

  • Pet Rent: If your rental allows for pets, it’s likely they’ll charge you a non-refundable deposit and/or a monthly pet fee.

 

  • Rent Will Likely Rise: After your lease is up, it’s quite possible your landlord will raise the cost of your rent.

 

  • No Autonomy: You have very little creative freedom with how you decorate and furnish your apartment. You must be careful about what you hang on the walls – and forget about painting!

 

It all comes down to what you value and what you can afford when you’re looking for your new place. For help determining if buying a home is right for you, give us a call today or visit your area branch!