Renting vs Buying a House Pros and Cons
It’s always a tough decision but when you first get you out on your own you need to make the call – to buy or rent? Let’s imagine you’ve decided you need the elbow room of a house so now your decision has come down to renting or buying a home.
It’s tough to say that renting is automatically better than buying and vice versa, but there are some factors you can think about to help you decide. Let’s lay out the unique renting vs. buying pros and cons so you can make the best decision for your housing and your financial future.
Pros and Cons of Buying vs Renting a House
Pros of Renting a House
Don’t like the house? Need to quickly move across the state to start a new job? If you rent – no big deal. If you own a house you must line up a buyer, but you don’t have to line up a tenant for your rental, you can just leave after your lease expires. Renting a house offers much more flexibility to come and go since you aren’t tied down to a mortgage.
Little to No Maintenance
A rental requires little to no maintenance. While homeowners have to mow their property or pay someone to do it, renters don’t have to pay a dime to any maintenance personnel. If the idea of maintaining a property gives you the jitters, renting your house is a more viable option.
Cons of Renting a House
Want to replace the kitchen backsplash? Sorry, no. Want to install a new toilet in the master bath? Your landlord isn’t going to budge. Renting a house can leave you feeling boxed in. Because you don’t own the home there’s a limited number of things you can do to customize or make it yours.
Pros of Buying a House
You can think of your mortgage as ‘forced savings.’ Every dollar you pay toward your mortgage is another dollar in the bank to your name. Home-ownership has been and continues to be one of the best things you can do to build your equity and steer your financial path to a bright future. When you rent, you’re paying someone else’s mortgage.
Yours to Build
If you own your home, you’re free to decorate and modify as you see fit. You can remodel the hallway bathroom, you can replace the carpet with hardwood flooring, or you can install a back patio. It’s your home, you own it, and it’s yours to craft and turn into your ultimate retreat.
On the surface rent cost and mortgage are nationally similar, but homeowners get tax breaks that renters don’t. Once the tax breaks are added in, your mortgage might be smaller than a rental payment.
Rent is rising across the entire country, but mortgage interest rates have leveled off recently. If you rent a home, expect your rent to increase every year. If you own your home you can lock in a rate, a term, and an amount owed which can make forecasting your financial future much easier.
Cons of Buying a House
On the Hook
You won’t have a landlord to rely on shouldering the expenses of anything that breaks. Major home expenses like broken water heaters, hail damage, or new carpet will come from your pocket book.
Roots Run Deep
It’s nice to have a place to settle down, but if you need to move for a job or family, selling a home isn’t as easy as breaking a lease. The real estate market will dictate how fast and for how much profit your home can be sold.
Up Front Money
Most rentals require a deposit, but buying home often requires a large down payment. Depending on your state, town, or neighborhood you could need 10’s of thousands of dollars to secure a reasonable mortgage.
Figuring Out Pros and Cons of Buying vs Renting a House with an Expert
If you still can’t figure out what’s right for you your best bet is to talk with a local real estate team about buying vs renting. A real estate agent can glance at your financial information, talk about your needs, and help you decide if you’d be a good fit for renting or what options you have for buying. With the right information from a real estate expert you’ll have a much better grasp on where you stand.
Making a Move on Renting vs Buying
Ultimately the decision to buy or rent your house is yours, but the above information, a rental vs buying calculator, and the help of a local real estate agent can help you figure things out. If you’ve read the renting vs buying pros and cons and are ready to buy, talk to The Meissner Group about pre-approval and to start scheduling showings before rates go up again.