Special offer

Better to Rent or Buy a House

By
Real Estate Agent with Keller Williams Realty

Before buying a house there are several considerations a person must consider before deciding. Here I am going to review some of those considerations:

Financial – When you buy a home the buyer will have higher upfront costs that includes the down payment and closing costs. The closing costs will include such costs as application, inspection, and attorney fees, etc. Mortgage rates will have an impact on your ability to buy and monthly payments. Currently, mortgage rates are showing some signs of easing and allowing buyers the ability to buy.  In addition, a homeowner is responsible for all maintenance to the property, as well as costs that you cannot plan for.  This is where homeowners need to have emergency funds set aside for these kinds of expenses.  Many renters think it is too expensive to own a home, but they need to think about this being an investment which will build equity in the long term.  Home equity represents the amount of the home you own free and clear.  It does not include the amount you owe on your home.  When renting the initial financial expense includes application fee, first month’s rent, and security deposit. The security deposit is normally returned if you leave the home in good shape. The rent amount you pay monthly includes maintenance expenses that occur while living in the home. The monthly rent amount paid is normally locked-in for 1 or 2 years depending on the length of the lease contract. Moving is easier since you do not have to deal with the complexities of selling the property.  However a renter could have their rent increased by the landlord depending on the market conditions, or the landlord could decide not to renew the lease.  Need to remember the renter is beholden the landlord at renewal time and handling needed repairs to the property.

Lifestyle – Whether you work from home or require to be at the workplace for your job can be a determining factor whether you buy or rent.  Renting a home offers greater flexibility where to live, but if you are planning on living in your home for at least 5 to 7 years buying a home may be wiser. The stage of life can be a lifestyle factor.  Those with children desiring to buy a home can be a major factor since they may want to set up permanent roots in a town, community, and school district.  Also, they do not want massive rent increases or non-renewal of a lease. Of course, renting can be the proper approach when trying to determine where you want to settle and live.  In addition, renting may give empty nesters the flexibility to decide the right location and proper fit where they want to live prior to making a final decision to invest in a home.   

Personalization – The biggest difference between owning or renting a home, owning you can modify the home to make it your own.  Renting a home, you have limited ability to customize to make it your own.  

Different solutions for each person – There are no one solution that fits all.  Contacting a real estate professional can help you make the right decision by reflecting on the different factors.    When buying a home there are upfront costs and maintenance.  It is a place where you can settle down for long term, establish roots in a community, and customize the property to your desires and needs.  While renting is a good option when you are uncertain where you want to live or do not have the resources to invest in homeownership.  

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

Ive always said--  unless their finances are a mess and job is unstable, if they are staying there for 3+ years, it makes zero sense to rent with all the tax deductions and appreciation.

Mar 19, 2024 06:18 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello John - you're correct each person is different and so are situations/circumstances. So, the solution will vary.  And timing of that decision also comes into play.  Your rent versus buy list provides a lot of food for thought.  

Mar 19, 2024 06:30 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello John, I wish I would of purchase a home at a earlier agent but not sure how long I would be in the area at the time but still purchase my first home when I was 23.

 

Mar 19, 2024 08:49 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

John Watts there are advantages to both, but generally the pros to buying far out weight the pros to renting.

Mar 22, 2024 04:52 PM