Deciding whether to buy a house isn’t an easy choice. What are the advantages of buying a house vs. renting? Let’s first consider the pros of renting.
Buying Vs. Renting
Advantages of Renting
- More freedom to move. Hoping to downsize? Thinking about changing jobs soon? Want to backpack around Europe for a year? Renters can pick up and go for the most part. It’s easier to get out of a lease than a mortgage.
- Not responsible for the cost of repairs. With renting, you don’t need to fret over surprise repair costs. If your refrigerator breaks, you call the landlord. Pipe burst? Call the landlord.
Disadvantages of Renting
- Rent rates will go up. Inflation and rising property values will make your monthly rent continuously increase. Landlords can raise the rent or sell the property without consulting you at any time. And when you pay your rent, you pay for shelter, but that’s it. That money doesn’t return to you in any form, whether it’s tax deductions or ownership.
- No tax benefits. You have no financial incentives such as equity, tax deductions, or increasing property value.
- You have little say in changes. If you want to build an awning or paint your bedroom blue or change the cabinets, you must get your landlord’s permission. Even if your landlord agrees, any improvements you make, won’t benefit you in the long run because none of the increased market value goes to your pocket.
What about a house? You’ve saved for years, and now you’re scanning the market, evaluating school districts and homeowners’ associations. Even if you’re financially ready to buy a home, consider the pros and cons of buying a house.
Disadvantages of Buying a House
- More difficult to relocate. It’s challenging to live a nomadic life (but not impossible) with a house.
- You have more expenses. Considering homeowner’s and flood insurance, HOA fees, property taxes, and utility bills, you might have a hefty monthly bill. As a homeowner, you’re also responsible for the upkeep of your home.
Advantages of Buying a House
- The satisfaction of owning. Every payment brings you closer to owning the house. Homeownership is not just a financial investment but also provides an emotional and social boost.
- Increase in value. Depending on the market, your home will likely appreciate. For every $1,000 you invest in your home, you could return $1,200 to $1,600 to your pocket, depending on when you sell. What you buy for $150,000 today could sell for $200,000 down the road.
- You have tax advantages. Many of the costs of owning a home are tax-deductible.
- Freedom to renovate. If you want to tear down a wall or add a screened-in porch, you don’t have to get a landlord’s permission.
- You have more privacy. Not only can your family spread out more in a house, but you don’t need to worry about noisy neighbors sharing a wall.
Deciding whether to buy a house isn’t an easy choice. If you’re looking for a local real estate agent who will give you the advice you can trust, give me a call.