Should You Rent or Buy a Home?
Moving into a new home is a major life decision that requires much thought and research. When deciding whether to rent or buy a home, you should consider where you want to be in the next 5-10 years. If you just need temporary housing, perhaps renting is your best option. However, owning a home is an investment that can reward you in the long run.
Here are some pros and cons of renting and buying a home.
The Benefits of Renting a Home
The biggest benefit of renting is your lower overall commitment to the property, both personally and financially. Since you are a tenant and not the owner, the responsibility of handling maintenance issues that often burden homeowners will fall on your landlord or property management company, unless specified otherwise in your rental agreement.
There also aren’t any expensive closing costs to deal with. You simply agree to pay a set price for rent each month as well as an upfront deposit to cover any damages — usually in the form of first and last month’s rent. Renting also gives you the freedom to move around and “test-drive” a location or style of home before deciding to buy.
The Drawbacks of Renting a Home
Regardless of the freedom that renting offers, there are several downsides to renting a home. The biggest drawback to renting is instability. While your rent shouldn’t change throughout the year, there’s a strong chance it will increase when it’s time to renew your lease. Such uncertainty and upheaval can be stressful as rental rates and cost-of-living go up. Furthermore, many view renting a home as throwing money away. As a tenant, you’ll live in the home but will be unable to build equity. Therefore, your monthly rent is passive income for the property owner.
Before committing to a rental agreement, make sure you know what maintenance services are included, what you are allowed to do to the property, and what you’ll need to pay for out-of-pocket. Renters are often not able to make any home renovations; you get to live in the property as is. And if you paint or redecorate, you’ll likely have to change it back before you move out.
While renting can be a good temporary solution, buying a home can help you settle down and create a permanent living space.
The Benefits of Buying a Home
Buying a home does require a higher overall cost and more responsibilities than rentals; however, it is an investment in your future — and quite possibly the best investment you can make. You can receive tax deductions for the interest and property tax portions of your mortgage payments, and as you pay your mortgage and complete home improvement projects, your home’s equity and value will increase. You’ll also have unlimited freedom to decorate your house’s interior to make it feel more like home.
With monthly rental costs increasing, it makes more sense to invest your money in a home. By working with a mortgage professional to find an affordable rate, you can possibly become a homeowner for around the same amount that you would be paying for rent each month.
Find Out Your Home Buying Options at Butler Mortgage
For over 25 years, Butler Mortgage has worked with both first-time and seasoned buyers wanting to own a home in Florida or Georgia. Let us help you find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form online.