Mike J. Gold
In general, Realtors, will advise you that owning your home is always a more sound financial option than renting or leasing a property. Most of the time this is true, however, not everyone's situation is the same. Indeed, many life circumstances may occur which make renting a better option.
One of the biggest obstacles to most potential buyers is the interest rate they will get on their mortgage loan. Many factors including the amount of the down payment you make at closing, your current credit score, and the type of loan(s) you are eligible for can affect the interest you pay. It is often a good idea to rent a home for a year or so to allow time to build up the necessary cash reserve, repair credit problems or locate a better loan option.
Many professionals find it necessary to frequently relocate in order to meet their company's demands. For these individuals a 'Month to Month' or 'Tenancy at Will' rental agreement that allows a tenant to move out of the property with 30 or 60 days notice without breaking the lease may be the only good option. Similarly, if you find yourself having to travel a great deal of the time and would therefore be unable to take proper care of your property, consider renting until your life style allows you to settle long-term in one location.
There are many reasons why one would not be able or willing to take on the responsibility of making essential repairs to a home. Age, disability or financial hardship may prevent one from maintaining the home in a safe and livable condition. Having a landlord who is responsible for repairs to the roof, plumbing, appliances etc. can be a welcome relief for those who would rather not have these kinds of concerns.
Owning a home comes with its share of risk and liability. Fluctuations in the market can reduce your home's value drastically. If your home's value drops below the amount of your mortgage, you are said to 'upside-down' in the property. This is not a desirable position to be in. Accidents resulting in injury to visitors, contractors, or in some cases, just passers-by can expose the homeowner to liability and could result is a lawsuit. Many choose to forgo ownership to avoid these potential pitfalls.
There are many pros and cons to both renting and buying. If you find yourself faced with this kind of decision, research the area you are looking to live in very carefully before deciding. Often, buying can still be a better option than renting, even if you have uncertainty in your job, your travel habits, or the housing market. Many opt to buy their property and rent it for the same amount as their monthly mortgage payment. This can provide the security of always having a property of your own, while allowing you the flexibility to come and go as necessary.