When it comes to deciding between renting or owning a home, you’re faced with one of life’s biggest decisions.
Whether you are just entering the housing market or looking to upgrade, you may be wondering if renting or owning a home is the right choice for you. There are advantages and disadvantages to both options that need to be taken into consideration when making this decision. Here’s an overview of the pros and cons of renting vs. owning a home.
Advantages of renting
Lower upfront costs – You get to avoid the big, complicated costs that come along with owning property such as a large down payment, closing costs and more. That alone gives you much more flexibility to move in as soon as possible at a smaller, more manageable price.
Less maintenance responsibilities – When it comes to having a place of your own, renting can be a great option. No need to mow the lawn or clog up over repair costs – they’re the responsibility of the landlord. You don’t have to worry about bothersome repairs that you’d be responsible for where you own. Renters also enjoy nice freedoms such as switching locations when their lease is up, and in this day and age there are options for just about every budget.
Lower monthly payments – When you think about the advantages of renting, the first thought that comes to mind is usually lower payments. It’s true – your landlord won’t require a huge down payment, and your monthly rent payments tend to be lower than if you were paying a mortgage.
Flexibility – This allows you to relocate faster so that it won’t take time away from your career or family’ opportunities. If that’s not an advantage, I’m not sure what is! Renting can also be less expensive than buying in some cases, giving one more financial freedom and peace of mind – who wouldn’t love having a little extra cash in their pocket? Put simply, renting has some major benefits that make it worth considering if you plan on changing locations within a few years.
Disadvantages of renting
Loss of security deposits – Renting can be a tough situation, because you could end up shelling out your security deposit without getting anything in return. That’s happened to more than a few folks if they have to leave before the lease is up – like if they lose their job or something suddenly comes up with family duties. It’s a risk that nobody should take lightly, but there are some landlords who don’t exactly play fair.
Limited customization – Any painting, renos, or general improvements all do require permission from the landlord first before making any changes—which, if you’ve ever tried dealing with landlords before you know, rarely happens in a timely fashion (if at all). I learned this lesson the hard way and had to heedlessly endure a living room in an ugly shade of yellow for months before getting the ok to repaint.
Advantages of owning a home
You can name a person to make decisions for you. This is known as a medical or health care power of attorney. It is important to choose someone who understands your wishes and values, and will be able to make decisions on your behalf if needed.
When creating an Advance Medical Directive, it is also important to include instructions for medical care that explain your wishes in the event that you cannot communicate them yourself. This document should be shared with family members, healthcare providers and other people who may need to know about your wishes in the future.
Disadvantages of owning a home
Higher upfront costs – Home ownership will bring more expenses than the initial costs of closing and taxes. There are ongoing maintenance costs, such as replacing appliances, painting, roofing repairs and landscaping costs. Plus there is the added obligation of buying homeowner’s insurance for your property, which can quickly become expensive. And don’t forget about all the hidden fees that many home-owners are required to pay, such as association dues or condo/coop fees.
Long term commitment – Mortgages can be quite lengthy; you’re looking at a minimum of 15 years and up to 30 years if you want the best rates on your loan. That’s a big commitment! On the other hand, renting means you can move away whenever you please without any major financial repercussions; all you’ll need to do is provide notice and take off whenever your heart desires.
Maintenance/repair cost – As the owner, you’ll be responsible for making any needed repairs and paying for any material costs associated with them. Compare that to renting, where those responsibilities usually fall on the landlord or property manager.
Choosing the best
It’s a tough decision to make when it comes down to the wires.
Should I rent?
Or should I buy it?
And if I do decide to buy, how can I be sure it’ll give me the security and freedom I want in life? Renting provides an easier option financially at times and can come with less stress—especially on those days you don’t feel like shoveling out money for a home repair!
But if you’re looking to invest in something more permanent (and have enough financial means to do so), then maybe owning a place of your own is the choice for you. Weighing out the pros and cons—both financially and lifestyle-wise—will help to direct you towards making the best decision for yourself. Don’t fret or rush; take your time checking out the resources and options that are out there.
Make sure you’re finding what will match both your practical lifestyle needs and desired outcomes from housing before committing! After all, only you know what’s best for yourself—so use this information wisely and go with your gut; congratulate yourself for taking charge of your future!