Buying has always been the more favored option as it is considered an "investment." However, there is no one answer to the "rent-versus-buy" question. The truth is, the better option depends entirely on your lifestyle and financial situation.
When it comes to renting or buying a house, money is not the only factor to consider. There's your age, work situation, desired location, and readiness to settle down. The rates of inflation and mortgage interest are also important factors to consider. Here's a closer look at the advantages and disadvantages of renting vs. buying.
Renting a Home
Renting is not seen by many as a long-term solution to housing, especially since you're missing out on building equity. However, there are several benefits to renting. For one, there are fewer upfront costs and paperwork required. Landlords are also responsible for the home's insurance, maintenance, repairs, property taxes, and HOA fees. Any unexpected emergencies, such as a blown pipe or roof replacement, are not the renter's responsibility.
Outside of the property's maintenance, renters won't need to worry about falling home values or paying for the property's tax bills.
On the flipside, renters are very limited in the changes they can make to the property. Renters can also face increasing rents every time the lease is renewed. Landlords can also decide to sell the property at any time, leaving renters without a home.
Owning a Home
First and foremost, owning a home provides you with a sense of stability and community. Not only do you have your own space, but you also have the power to decide on the look and design of your home. When you own a property, you can also build equity and gain tax benefits.
That being said, owning a home comes with a lot of responsibilities. Homeowners are responsible for any repairs and remodeling done to the property. There are also monthly mortgage payments, property taxes, HOA fees, and insurance.
So Which Is Better?
As previously mentioned, there are plenty of factors to consider before buying or renting a home. In general, you should ask these five questions before deciding.
-
How much can you afford in monthly housing costs?
-
Are you prepared to make a long-term investment?
-
Can you afford home repairs or maintenance costs?
-
How long do you plan to stay in the home? (Experts recommend renting if you're planning to stay less than five years)
-
Do you have a stable job situation?
If you can't decide which option is best for you, we recommend speaking with a real estate agent who can help you make a well-informed decision.
READ NEXT: 7 Key Questions To Ask a Real Estate Agent
