It's a question asked over and over by people at the crossroads of where to live. Should I invest in buying a home or keep renting? Can I afford to buy a home? Is renting easier than dealing with everything that goes along with owning? So many questions! While we can't answer what is the right thing for you to do, we can offer a little insight into the advantages and disadvantages of each. Give you an opportunity to see which might be best for you and your family.
RENTING
It's easy to automatically assume buying a home is the better choice. However, there are some advantages to renting a home. Many of the reasons people choose to rent over buy is because of lifestyle choices. Here are a few things to consider...
Flexibility
If you or your spouse have a job where you have to move often, buying may not make sense. For real estate to be a good investment you need to own the home for a few years. If you only plan on staying for a few months or want flexibility, renting is a good option. If you are new to an area and aren't sure what part of town or neighborhood you would like to be in, renting is also a good way to move around easily while you figure it out. Once you know you might be staying there more long term buying may become your next step.
Finances
Depending on where you are, you may simply not be able to afford to purchase a home. There are extra costs associated with buying a house above your monthly mortgage so you have to know if it works with your budget. Click here to get our First Time Home Buyers Guide which has information on what expenses you may incur when buying a home and for a worksheet to see how much you can afford.
Maintenance Costs
When you rent your home the landlord handles the problems. If your plumbing goes out you don't have to worry about a pricey plumber...you just may be out of hot water for a while! If there are structural, wiring or other big ticket items the landlord will be the one to take care of it. The costs to upkeep a home including upgrades, taxes, insurance, lawn care can add up quickly so it definitely can be an advantage to rent.
It's not always a great deal
Depending on where you live and what the current real estate market is in your area, investing in a home may not be the best deal. You pay a lot of interest and depending on the homes appreciation it may not make you the money you think it will. It's important to look into all of these things before taking the leap. If you are unsure, a local realtor can be a great place to start.
BUYING
If you are leaning towards buying a home there are plenty of advantages! It can be a very exciting time, especially if it's your first home. Here are some reasons why buying could be a great choice for you...
Financial Investment
The reason you hear so many people talk about real estate being a good investment is because it's true. It's a different type of investment than stocks, bonds and things of that nature because you have to have a place to live. You'll either be paying rent to someone else or paying on your mortgage each month. With the latter you will gradually be acquiring equity. When you rent you will never end up owning anything with each of those payments.
Tax Deductions
As a homeowner there are so many things you'll be able to deduct from your taxes. Mortgage interest deductions, property taxe credits, energy efficiency tax credits, home expenses and improvement deductions to name a few.
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