There comes a time when a decision must be made between buying your own property or renting someone else’s. Renting is easier in a lot of ways- the responsibility to maintain is off your shoulders but you’re paying your landlord’s mortgage. Buying seems more financially responsible, but the financial burden can sometimes go deeper than just your monthly mortgage payment when repair is in order. There are many pros and cons to either renting or buying. Here is a list to help you decide what is right for you.
Pros of Buying Home:
- Long-term benefits such as security, equity, and growth in personal wealth. With the help of an experienced real estate agent, and the proper steps, the house you are buying will likely grow in value in the years to come.
- Depending on the property type, you will have more privacy, more space and more room to grow.
- When you own a home, you have complete control of the appearance. From painting walls to décor changes and renovations, you can have a space that fits your needs and style.
- If you are spending time away from your home, you can also rent out the space, either long term or short term. This allows you to generate income to put towards your monthly payments.
- With consistent and on-time payments to your mortgage, you can improve your credit profile.
Cons of Buying a Home:
- It can be detrimental to a person’s credit if paying a mortgage on time is going to be difficult.
- There are additional costs that come with homeownership including interest rates, taxes, insurance, and maintenance fees that you may not initially be prepared for.
- You have less flexibility when it comes to moving compared to someone who rents. A tenant can move away from an area as soon as they fulfill the notice period. A homeowner likely depends on selling their property in order to buy another.
- Renting the property out keeps you tethered to the area. Even if you’re away, you as the landlord are responsible for maintenance and upkeep, unless you hire a property management company.
Pros of Renting a Home:
- Flexibility: If you are young and don’t want to commit to a city or an area, then renting is the best option for you. It is much easier to get up and move when you rent a space compared to owning a home.
- Repair Responsibility: As a renter, you don’t usually have any responsibility when it comes to home maintenance. You’re only responsible for the damage that you incur.
Cons of Renting a Home:
- A tenant is bound by their lease agreement, which can prevent them from renovating or making changes to the property. You don’t have the option to customize your living space as much as you may want.
- Renting doesn’t offer you any wealth improvement. You aren’t investing your money. Instead, you are providing the property owner with cash flow and more equity on their property.
If you’re not ready to commit to one location for an extended period of time, then renting is best. If you are ready to settle down and want to invest your money instead of just spending it, buying a home is the smartest choice. The right agent will help you find a property at the right price point so that you can afford your monthly payment and begin to see your equity grow. Click here for a Free Home Buying Consultation.