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Is it Better to Buy or Rent?

After a certain period of time of renting you may find yourself wondering whether you would be better off to continue renting or to take the plunge and buy a house. Certainly, there are many advantages as well as disadvantage associated with both options which you should understand before making a decision. In addition, it is important to realize that your unique situation may also play a role in which would be best for you at the current time.

Renting

Renting can be the best solution for many people. If you are not financially ready or even emotionally to own a home, renting can provide you with the opportunity to wait until you are ready. For example, if you have recently moved to a new area you may wish to rent for awhile in order to make sure a new job is going to work out or that you like the area before you commit to a home purchase. Renting offers a number of advantages including:

• Less responsibilities
• Fewer maintenance and repair issues
• No large down payment
• Fewer monthly expenditures
• Easier to budget as expenditures are fixed
• Easier to move as you have fewer obligations
• Move-in costs are relatively low
• An easier solution if you travel frequently

There are also some disadvantages which should be considered as well, however. These include:

• No special tax deductions
• Limited decorating scope
• Usually must deal with rent increases over a period of time
• Usually involves restrictions; including noise, pets, etc.

Buying

Owning a home can be an intensely satisfying experience and also offers a number of benefits as well, including:

• Offers a sense of pride and community
• Offers an excellent form of investment as the property appreciates in value
• If you have a fixed rate loan, your housing costs can be stable
• Offers tax deductions for taxes and mortgage loan interest
• Provides you with the ability to borrow against your equity in your home
• Freedom to make changes and improvements

Of course there are also disadvantages as well which should be carefully considered before you make a final decision, such as:

• You may need a substantial down payment
• Owning a home requires a large commitment of time, money and emotion
• Your money may be tied up in your home, making it difficult to pursue other activities or purchases
• You are responsible for maintenance and repairs, which can be costly
• You will need to pay additional expenses such as insurance, property taxes, home repairs and maintenance, etc.
• Move-in costs may be higher with owning than renting