Choosing whether to rent or buy a home is a huge financial decision. There are benefits and downsides to both options, so it is important to carefully weigh the pros and cons before making your choice.
The Benefits of Buying
When you buy a home, you put down roots in a neighborhood, which can provide a sense of stability and community. You don’t have to worry about changes in rent and you have an asset that will appreciate for years to come. By purchasing a home, you receive tax benefits, such as tax deductions. You can event deduct interest on second mortgage debt if you’ve substantially improved the quality of the home.
The freedom to alter your home’s structure is one of the biggest advantages of owning a home. Unlike a rental home, you can renovate or remodel a purchased home however you’d like. That includes making the home more energy-efficient by adding solar panels or insulation, which can save you money on utilities. You can also monetize your home. For example, cultivating gardens or renting out rooms can be a great way to save money and generally wouldn’t be allowed in a rental home.
What are some other advantages to purchasing a home? A major one is that you’re forced to save money every month by paying your mortgage. Making mortgage payments on time boosts your credit rating and can help build strong credit. You also don’t need to worry about rules or restrictions from a landlord. Overall, will have more freedom and privacy if you purchase a home instead of renting one.
The Benefits of Renting
Although purchasing a house is the smart choice for many families, renting one has many advantages as well. When you rent, you don’t have to make a major mortgage investment. In most cases, you just pay a deposit and the first month’s rent, which is a much smaller financial burden than the price of a down payment for a home. In addition, you’re expected to insure the contents of the property alone, not the whole building. When things go wrong around the house, it falls on your landlord to make repairs.
Many people find renting to be less stressful. When you rent, you don’t need to worry about property taxes, private mortgage insurance, or paying the homeowner’s association. You don’t have to worry about a wobbly housing market threatening the value of your property. You spend less on energy, and you likely will not have much responsibility in terms of maintenance, such as mowing your own lawn. Tax credits for renters can also ease your burden. Most importantly, renting gives you flexibility. Since you’re not tied down by a mortgage, you can move to another house more easily. This is incredibly beneficial to young people, who need flexibility with school and work.
In short, purchasing a home can be a better option for those ready to make a long-term financial investment. Rentals work better for those who need flexibility and simplicity. Whether to rent or buy depends on your current lifestyle and financial status. If you are confused about buying or renting, or want to look at new properties, contact Berkshire Hathaway HomeServices Crager Tobin Real Estate today!