Wednesday, March 26th, 2014 at 11:40pm
Buying versus renting
While there are many clear advantages of purchasing real estate, rather than renting, you should also consider the advantages and disadvatages of both before you make the important choice between the two.
- To build equity – Each month that you make a mortgage payment, you’ll build equity through paying down your loan balance. Over time your equity will grow, and the money that you could receive upon selling your property could help fund either your next real estate purchase or your retirement.
- Tax Savings – Homeowners may deduct the interest and property tax payments they make on their principal residence from their income taxes. They may do so on their Schedule A itemized deductions.
- Control – There’s nothing like knowing that the home you’re living in is YOUR home and what you say, goes. You may make improvements to your home and customize it in the way of your choosing without approval from a landlord.
- Flexibity – When you rent, in contract to when you own, you have the ability to move with less cost and without the need to sell your property. Your lease has an end date, which can be a good thing, in that at that end date you may choose to move out to continue your lease.
- Surprises – There are fewer surprises when it comes to renting, namely in the form of maintenance costs. If there is an issue with your property, repairs are a phone call away by reaching the landlord, and the best part is that you don’t pay the repairs bill, the landlord does.
- Less upfront costs – When purchasing you’ll need both the cash for the down payment as well as the closing costs. So renting, which may only require 1-2 months rent upfront, has a lower barrier to entry.
In the end, the decision which is the right one for you will depend upon both your financial situation and the time in which you plan to stay at a particular property. The longer you plan to stay there, the more buying will make sense than renting. But the more uncertain your future is, the more renting will take priority over buying.
Questions, or ready to apply? Please reach out to me.