There are both advantages and disadvantages to either owning or renting your place of residence. The right choice will depend on your circumstances. You can use this guide to narrow down which decision is the right one for you.
Should I Rent or Buy
Answering the question of whether to rent or buy taking time. It would help if you understood clearly what was at stake with this decision. Either way, you will be paying for a place to live. You better make the most of the money that you spend.
When you rent a place, you will be paying rent. Each month your rent goes directly to the landlord, and you never see any of it again.
When you pay a mortgage, you are paying back a portion of the debt. Some of that money goes towards the bank and pays off interest fees and other charges. The rest of the money pays down the principal, which you can access again after selling the home.
Advantages and Disadvantages of Renting and Owning a Home
Deciding on whether to buy or rent will come down to your circumstances. In some situations, it will make sense to rent your place rather than buying it. However, in general, purchasing makes the most sense financially.
The cost to rent a property is often more expensive than purchasing the same property every month. When you purchase the property, you are assuming some of the risks. You can avoid that risk by renting instead.
Advantages of Renting:
- 1. Less Responsibility
- 2. Landlords Take Care of Repairs
- 3. Freedom of Movement
Disadvantages of Renting:
- 1. Can Cost More
- 2. Some Landlords Can Be Difficult
- 3. Rent Increases Every Year
The Bottom Line on Renting:
Renting makes a lot of sense if you do not plan on staying in the area for long. It is a lot easier to pick up your things and move to a new community when you do not own the property. All you have to do is wait until the end of your lease, and then you can move without any strings attached. However, every month you will be spending money on rent that you’ll never see again.
When you buy property, you become responsible for it in its entirety. That includes the mortgage. Most mortgages will be more affordable than the rent would be on the same property. That means that you’ll spend less to stay there, but you do pay for that lower price in other ways. One of the most significant impacts will be on your freedom of movement. It becomes much more difficult to pack up your things and move to a new town when you buy a house. You need to list the house for sale and find a buyer before you can even consider going to a new area.
Advantages of Buying:
- 1. Build Equity Each Month
- 2. Do Not Deal with Landlords
- 3. Pay It Off Eventually
Disadvantages of Buying:
- 1. More Responsibility
- 2. Less Freedom
- 3. Long Term Commitment
The Bottom Line on Buying:
If you’re looking to save money monthly, then buying a house might be a good idea. If you own your home then you have the ability to make improvements and upgrades. Making your home more efficient has a great ROI because it can help conserve energy and lower your gas rates. Since these are monthly expenses you can save a significant amount of money by the years end.
To Rent or Buy? That is the Question
Becoming a homeowner is a significant step in life. It is generally a good idea for you to try and buy wherever you are living. However, it is not wise for you to decide too hastily. It would be best for you to wait until you’re ready.