To buy or not to buy? Well, if paying rent is what you’re used to, taking that step toward purchasing your first place can be intimidating. For many people, the benefits of buying a home outweigh the advantages of renting. This is especially true when interest rates are low, making the cost to rent surprisingly more expensive than buying. If you plan to stay put for more than six years, consider saying goodbye to renting and hello to homeownership. This is your guide to buying vs. renting.
THE BENEFITS OF BUYING
There are all kinds of benefits to buying a home: No noisy upstairs neighbors, the freedom to make renovations, and the bonus of your own outdoor space, just to name a few. Some homeowners even experience financial benefits, like stability, increase in equity, and tax savings.
If you like stability, you may enjoy the benefits of a fixed mortgage. At a fixed rate, your monthly payments would be consistent for the duration of the loan term. Rent, on the other hand, has the potential to increase annually. If you’re looking to build equity, you may be interested in buying a home.
On a long-term, owning a home could allow you to build equity and increase the value of your investment. Depending on your financial situation, mortgage interest may be deducted from your state and federal income taxes, and a portion of your property taxes may also be deducted. You should consider consulting a tax professional about your specific situation to see how the tax savings benefit of homeownership could apply to you. Possibly the most exciting benefit of owning a home is that it’s yours. You get to settle in and make long-term plans and create a home that reflects who you are. There’s something liberating and empowering about homeownership that renting just doesn’t fulfill.
THE BENEFITS OF RENTING
Although buying has its benefits, renting may still be the way to go. Renters enjoy plenty of perks with this housing solution that works for their lifestyle. If you’re not-so-handy around the house and you’d prefer not to pay any bills on the side, you may like this benefit of renting.
Renters are often able to rely on their landlord or property management to make and pay for home repairs. And, in some cases, your utility bills may be rolled into your monthly rent payment. Talk about convenient! Renting also allows you to enjoy the benefit of shorter commitment. Commonly, leases are six to 12 months, but some landlords or management groups allow lease terms as short as three months! This is ideal if you’re trying to avoid feeling “tied down” to one specific location. Here’s another perk of renting: You can try it before you buy it.
With renting, you get to experience different neighborhoods, cities, and states before you decide this is where you want to stay long-term. With that comes the ability to try different styles of housing. Are you more inclined toward an open-concept studio or a compartmentalized 2-bedroom apartment? What are your space needs and what square footage is comfortable for you? This advantage of renting makes it a great prerequisite to buying. You may be seeing a common thread here. What renting boils down to is flexibility. And that may be a benefit you’re not yet willing to give up.
In the battle of buying vs. renting, it’s up to you to decide. We hope this outline of some of the benefits of both will help in your decision. Talk to one of our mortgage experts and see if now is an opportune time for you to take out a mortgage and pursue homeownership.