Whether you should buy or rent a house depends on your financial situation and personal goals, nothing else.
You’re willing to buy if you’re debt-free, have adequate emergency funds, have enough money to pay upfront, and know your mortgage payment won’t cost more than 25% of your net salary. We’ll talk about that a little later.
If you’re working to pay off debt or are planning to change jobs, renting makes more sense. You may have heard the myth that paying rent is a waste of money every month. It’s not true. Housing is an essential expense. Now, buying a lottery ticket is throwing money out the window.
Life Is About Taking Control Of Your Finances And Making Smart Choices!
Is it better to rent or buy a house? Whether renting or buying is better is up to you.
Buying a home gives you the title, privacy, and equity on your property, but repairs, taxes, interest, and insurance are expensive.
Renting an apartment requires less maintenance and is more flexible, but you may face increased rent, noisy neighbors, or a difficult landlord.
Advantages And Disadvantages Of Buying And Renting
Even if you’re financially ready to buy a home, you may not be thinking about upcoming repairs. And that trendy apartment you love may have nosy neighbors.
So let’s see what’s good (and bad) about buying and renting.
Benefits Of Buying
You can actually own the house. But when you pay off your mortgage, you’re on your way to owning freedom. And once your house is paid for, it belongs to you! You are pleased to know that you have made the American dream come true.
You can profit from appreciation. Your home will most likely increase in value over time depending on the market and how you take care of it. What you buy for $200,000 today can sell for $260,000 later.
You benefit from a tax advantage. Many costs of owning a home, such as property taxes and mortgage interest, are tax deductible.
You have the freedom to renovate your home. As an owner, you can do whatever you want with your home. If you want to paint hot pink from top to bottom, no landlord can stop you, although your spouse may have something to say about that.
You have more privacy. Ricky and Lucy fight again – and because the drywall of the apartment is as thin as a card, every tenant can hear them. But having a home means no Ricky, no Lucy, and no cramped apartment. Just you and peaceful silence. Of course, if your dream home is an apartment in the midst of bright lights and city life, that won’t apply.
Cons Of Buying
Walking Is More Difficult
Getting out of the house isn’t as easy as breaking your lease, packing your backpack, and getting a one-way ticket to a well-known place.
The Same Goes For Work-Related Moves
You will need to rent or sell your home or prepare to leave it uninhabited for a long time.
You Have More Expenses
Remember how inexpensive renters insurance is? We hate to tell you this, but home insurance is so much more. Combine that with a potential flood policy, homeowners association (HOA) fees, property taxes, and higher utility bills, and you’re looking at more monthly expenses.
You Are Your Own Owner
When your roof leaks, it can be a full-blown crisis that forces you to pour your savings into paying for a new roof. If you are a tenant, a leaky roof is simply an inconvenience that is solved by placing a bucket under the leak until your landlord fixes it.
Advantages Of Renting
You can move around easily. Are you fed up with the city you live in? When renting, you don’t have to stay in the same place. Also, getting out of a lease is much easier than getting a mortgage. You don’t have to pay for maintenance. If the stove is broken and the hose is broken, you don’t need to call a plumber or go to an appliance store. You call the landlord. One of the biggest benefits of leasing is that you never have to worry about unexpected repair costs.
It’s cheaper in the short term. In addition to virtually no maintenance costs in an apartment, renters insurance is much cheaper than insuring a home. Your move-in costs will also be lower, as you only have to provide a small security deposit instead of a large down payment. Plus, when you join, you won’t have to pay HOA fees or silly private mortgage insurance (PMI) fees.
Disadvantages Of Renting
Rent will increase. Even if you’ve found a good deal in a hot neighborhood, inflation, competition, and rising property values will drive your rent up year after year. You are not financially motivated. No tax deduction. Unfair. No increase in property value. So even if you spend your rent on major living expenses, you may still feel like you’re not making any progress. You have less freedom to innovate. Even if you think hardwood floors will look great in the bathroom, your landlord may not approve, especially since he will be the only one paying for the renovation. You don’t have much to say about the appearance of your home.
This is! Whether you’re ready to buy or want to continue rent a house, you now have a better idea of what you’re getting into.