Renting vs Buying

What to consider when comtemplating renting or buying your next place?

This decision has many factors involved. Some people continue renting because of the perceived flexibility of moving quickly. Although moving before a lease is up can cost you money. Some continue renting because they don't want to keep up with a yard and don't have time for other home ownership responsibilities.

Here are a few questions to ask yourself: 

• Do you want to spend several years in a house and in a neighborhood?
• Do you enjoy lawn and garden work or do you want to look for a small yard?
• Do you need flexibility to move suddenly to care for family or other reasons?
• Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?
• Is personalizing your surroundings through paint or other cosmetic changes important to you?

Financial security may be one of the strongest reasons for buying a home. You are building equity with each payment on your mortgage vs paying rent and not having that money build up.  There are short term and long-term tax advantages to homeownership. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your taxable income, which could reduce your tax bill.

Other considerations in buying a home:

1. Buying Builds Equity. Buying a home is good use of your money. As you make payments over time, the equity increases. When renting, you get no return for your money. Once the money is spent, it's gone. 
    
2. Save Money on Taxes. Mortgage interest and property taxes are tax-deductible, making this one of the biggest benefits of homeownership. This means that you could possibly pay less tax or you get a bigger tax return.
    
3. Money Spent on Improvements Adds Value. Unlike rental improvements, when you paint, make additions, or improvements to your home it increases in value. 
    
4. Homes as an Investment. Investors say overwhelmingly that real estate can typically be a safer and better investment than stocks and bonds!
    
5. Low Interest Rates. The nation is still experiencing record low rates which allows buyers to buy more house for their money at lower monthly payments.
    
6. More Space. If you've always wanted that extra room for an office or weight room...here's your chance. Renters typically live in smaller spaces...home buyers have more square footage for their money.
    
7. Capital Appreciation. Unlike buying a car, or renting... many homes (when taken care of) will appreciate in value. 
    
8. The "Owned" Home is your Castle. You control the decor. You can paint and decorate as you like. You can add to the size of your home and make improvements. You will not have to face rent increases
   

More information from Crye-Leike, Realtors on the home buying process