To rent or to buy?
Maybe you’re just starting to look for a place of your own and can’t decide if you should rent or buy. Or maybe you’ve been renting a place for a while and want to explore the possibility of buying a home, but you aren’t sure if you’re ready. While only you can decide the best option for yourself, it’s important to analyze the pros and cons of each and see how those align with your priorities. Here are some things to think about when it comes to the big question, “Do I rent, or do I buy?”
Can cost less
More flexibility if you need to relocate
Maintenance and repair costs are not renter’s responsibility
No tax incentives
Rent could increase
It’s not an investment
No building of equity
Can build equity
Value of home may appreciate
Satisfaction in homeownership
Possible tax incentives
Make the space your own
Responsible for all maintenance and repairs
Relocation involves more than just moving
Upfront costs are higher
Benefits of renting
Renting is a great option if you plan to move around and don’t want to commit to one location because it provides more flexibility if you decide to relocate. Another benefit of renting is that maintenance costs for things like lawncare and broken dishwashers are usually the rental management’s responsibility. Plus, renting gives you a chance to try out different types of living spaces and explore different neighborhoods to see what works best for you.
While renting is often thought of as more affordable than buying, this is not always the case. It may be a good option if you need some time to save up for a down payment? and other costs associated with buying your own place; in some cases, however, your monthly mortgage? can end up being less than your monthly rent.
Benefits of buying
Buying might be a better option for you if you plan on staying in one location for at least five years or so, and you’re ready to truly call a place your home. Homeownership gives you the opportunity to take pride in caring for the property you own. It allows you to build equity? over the long term and has potential for tax advantages that don’t come with renting. One more benefit of buying: You can customize your space the way you like, from painting the rooms, to hanging curtains, to nailing a picture into the wall, without worrying about running it by your landlord.
In considering whether to rent or buy, it’s important to see where your money is going. Keeping track of your expenses can give you a better idea of areas where you could cut back and tuck a little extra money away to save for a house. It may seem tedious, but keeping track is a great way to get a more accurate view of your financial situation.
Decide what’s right for you
It’s important to do your research. If you end up deciding you’re not ready to buy, be sure to read the next steps to learn how you can prepare for when the time is right. Even if you don’t have the funds for a down payment right now, if it’s something you can start saving for, homeownership could be an option in the future.