The Advantages Of Renting Or Buying A Home
It is often said that buying a home is better than renting a home
. This can be true, but is mainly determined by the situation of the buyer.
Both renting and buying have their advantages, just depending on the circumstances.
The following are some great advantages to buying and owning a home instead of renting.
The first advantage is that when you buy a home you gain equity. As soon as you buy a house you have gained considerable equity.
A 5% to 10% down payment has given you 100% ownership of that property. As time goes by, payments are made and your mortgage will decrease, the property will appreciate, and your equity will continues to grow.
Even if your home never appreciates, which is very unlikely, and stays the same you are continuously paying down your mortgage.
If you rent, your payments are similar to what a mortgage payment would be, with really gaining only one main benefit, and that is having a roof over your head. You are literally paying someone else's mortgage and creating equity for the owner of your rental.
Second, possessing your own home creates a sense of ownership. Buying your own home is a great feeling.
There is a great sense of ownership and accomplishment. When you own your own home you have the ability to hang pictures whenever and wherever you want, remodel and renovate, knock out walls, add bathrooms and pretty much do whatever work or improvements you want while also gaining all the benefits for improving your property.
Third, owning your own home gives you great stability. It's a great feeling to know that if you lock in a mortgage rate for 5, even 10 years, that your payments won't change. As far as renting goes, depending on the municipality's rules, a landlord generally can increase the rent.
Fourth, you have the possibility of a bright financial future. Owning your own home gives you some great advantages for your future. Aside from building equity in your home you are paying down your mortgage.
The great thing about a mortgage over rent is that you eventually pay it off. Once you have paid off your mortgage, there will be no more monthly payments.
Most people will hear that buying a home is the right financial and personal decision you should make. Buying a home is not for everyone, as it really depends on your personal circumstances.
There are actually many reasons that it is better for some to rent rather than buy a home.
First, some situations are more conducive to renting. Situations like planning on moving in just a few years, single persons who don't need stability, those who do not yet have enough savings, and many other reasons.
Not everyone has thousands in disposable income to put down on a deposit for a new home. Don't forget to calculate the additional capital required to start owning your home when comparing to renting.
When you put down a down payment, you are actually investing that money, but that doesn't take away the fact that you'll have to make a significant withdraw out of your bank account.
Another factor that people forget to consider is you should actually look at the cost in longer terms than simply monthly. The reason for that is if you may be moving in the coming years, you will need to calculate the closing cost vs. increase in equity to see if you come out on top.
Second, it takes much less time to move into a rental space then to buy a home.
You can commonly do a complete research of the rental market, make a decision and move within a week. The same cannot be said for finding a dream home.
You have to factor in the search, loan agreements, inspections, and closings which typically take months to process.
Third, probably the best part about renting is that there is no maintenance because it should be taken care of by the rental manager.
Although often overlooked, this is one of the biggest advantages to renting. You are virtually guaranteed to not have future out of pocket expenses and headaches associated with things breaking down in your home.
Besides saving money by not having to repair things and purchase new appliances, you don't have to miss work to wait for the serviceman to show up.
Both renting and buying have pros and cons. You should determine what is right for you when it comes time to move.
by: Jack Landry
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