Many people struggle with the decision of renting versus buying a home. In most cases, you’ll find that buying a home has more advantages than renting a home, but not in all cases. And more specifically, the right decision depends on your specific financial situation and lifestyle. Buying is not for everyone. To follow is a list of advantages and disadvantages to both renting and purchasing a home.
If you are considering buying your next home, you want to make sure you’re going to stay in the home for several years. You want to stay in your home long enough to allow the property to appreciate, increasing the home’s value and your return on investment. Typically you’ll want to stay in the home for a minimum of 3 years in order to begin increasing your ROI for your home. One main advantage to buying a home is that when you take out your mortgage loan, you can lock in your monthly payment for 15 - 30 years. If you paid rent for this length of time, your rent would increase periodically and often, causing you to pay much more for the property over time. You can also deduct any mortgage interest on your income taxes which is another advantage to owning your home.
There are however some instances where it makes more sense for people to rent than to purchase a home. If you are one that moves often, be it for work, travel or other reasons, you might choose to rent. Again, you’ll want to stay in a home you buy for at least 3 years to make a profit. If you don’t have at least 3 years to spend in a home, you should look into renting your next property. Renting will also relieve you of burdensome maintenance repairs and expenses as well as any lawn maintenance tasks. These tasks are the responsibility of the apartment complex management. Renting could also provide you with a number of neighbors in close proximity to you increasing your access to immediate socialization and possibly increasing your security.
If you are struggling with the decision of whether to rent or purchase your next home, you should weigh such factors as how long you’ll be in the next home, what kind of time you have for home repair/maintenance tasks and your specific financial situation. It might be a good idea to sit down with a financial representative from your credit union or bank, or even a real estate agent to evaluate all of your options and to see how much of a monthly mortgage payment or monthly rental fee you can afford. This alone could help make this decision much easier for you.