It’s easy to assume that the decision to buy or rent a home is purely financial, but it’s often not the case.
Often, the decision is made based on lifestyle factors, which can affect financial well-being in two very different ways.
Many people choose to rent a home in the city, while others prefer to buy.
Many factors need to be considered when deciding which option is best for you and your family
Whether or not you decide to purchase a house depends largely on what kind of lifestyle you want and how much risk you’re comfortable with taking on financially.
So what are the advantages of renting vs buying a home?
If this is the question that you seek answers to then keep reading to the end of this post.
Homeownership Vs Renting – What is the Debate All About?
It is a debate that has been around for centuries. Homeownership Vs Renting – What is the Debate All About?
Some people believe that homeownership offers benefits that you can’t get when you rent, while others say that renting offers advantages in terms of flexibility and cost.
Homeownership is often regarded as a better option than renting.
Homeownership has benefits that renting does not. When you rent a property, you are a tenant and you have no say so on how the property is repaired nor do you have any say-so on who repairs it.
So when you rent you have less control over the property.
While homeownership offers a sense of security. Homeowners have the flexibility to renovate or redecorate their homes when they choose to do it.
On the other hand, renters don’t have to worry about repairs or maintenance costs.
What Are The Benefits Of Renting a Home
The housing market is a tricky place to navigate.
Some factors can make owning a home have more or fewer advantages, but the cost is the one thing that most people consider when deciding whether to rent or buy.
In some cases, renting can be more expensive than buying.
But in other cases, renting can be cheaper than buying depending on where you are located and what state you live in.
Renting allows you to live in a different neighborhood or city.
Renting is an affordable housing solution. With the rising cost of living in cities like San Francisco, renting is a convenient and low-cost alternative.
You can move when your lease is up without having to find a new home!
This means that you will have more control over where and how much rent costs, which could be good or bad depending on what neighborhoods are like nearby.
So what is the financial benefit of renting?
One thing, it is easier to change from complex to complex.Another is you do have some idea of what your fixed cost will be.
There isn’t a fluctuation of taxes as it would be with homes.
You wouldn’t have to make necessary major repairs on the property.
If you know you want to be able to save money.You have to keep in mind the repair cost.
When you own a home you are the one who will have to make the repairs on the property.
Renters insurance is a must-have for all renters.
This type of coverage tends to be cheaper than Home Owners Insurance on your property, so it’s worth considering when you’re renting!
What Are The Benefits Of Owning A Home
Many people have quite a few misconceptions about buying a home. First of all, they think that buying a home is extremely expensive.
This would all depend on where you live and what is your current circumstance.
If you are in a position where you have been on your job a few years or you have owned your business a few years and have a stable income.
Then homeownership would make a lot of sense to you.
Because you can move towards owning your property vs having to rent someone else’s property.
The thought of buying your first home can be both exciting and scary.
But before you line up for an appointment, some things may help ease the process:
A quick tip: “Research were in town or city prices are going so it’s easier to plan out what kind of home to buy. It might take time (and money) but once again doing a little research will go a long way. Whether its school districts or neighborhoods within walking distance from stores with necessities like grocery stores restaurants etc”.
Homeownership is not only a good investment, but it also provides an appreciation of the property over time.
This means that your property will be worth more in the future, which is good for resale value.
Take for example the most recent hot market we just had.
If you would have been able to buy a home fast in Plano Texas around 2005.
You would have been able to pick a home up in Plano Texas for around $164,000.
This same home would be like a 3 bedroom 2.1 bathroom 2000 square feet, built around the 1990s.
Because it was a hot market. This same home went for around $410,500 recently sold. Because of privacy reasons, I won’t give the address of this example.
If you put 10% down you would be in the home for $147,600. If you would have sold this home today for $410,500 that would be a: $262,900 difference.
This is an example of home appreciation over 16 years.
Another benefit of homeownership is you would be able to write off the taxes and mortgage rates on your taxes. (Please consult with an Accountant for updated Taxes appreciate rules.)
Each year you can write off the taxes and mortgage rates of your home.
Normally, at the end of the year, the mortgage company will give you a 1098 form.
This is an IRS form that is used to report mortgage interest that is more than $600.00 during a tax year.
This information can be found at IRS forms publication.
Another benefit is not hearing your neighbors through the walls.
If you have lived in more than one apartment.
Then I’m sure you have heard the loud banging noise at night.
If you get tired of hearing loud noises either on the side of you or above you then homeownership makes a lot of sense.
One last benefit of owning your home is you don’t have to deal with bad management.
Sometimes when you are renting and you have bad management it can make a disastrous relationship.
It’s just like being in a bad marriage. If for some reason you want a divorce then you have to go through the process of ending the bad relationship.
Bad management can make things a bit uneasy when you are renting were as in homeownership you are the owner who has the deed to the place.
What Are Some Things To Consider When Renting vs Buying A Home?
So what are the advantages of renting vs buying a home?
One of the main factors to consider when renting or buying a home is how much you can afford.
It’s important not just in your bank account, but also where will this house fit into all aspects such as monthly bills like insurance and electricity; are there enough bedrooms so that everyone has their own space without feeling cramped up with someone else nearby?
What type of neighborhood do I want my children growing up in? Is it an old urban area, is it a suburban that is being renovated, or transitioning into something new again?
The benefits of ownership are as following:
1. You have a yard where the dogs can play and run and you don’t have to pay a pet deposit.
2. You have Appreciation
3. You can write the interest and taxes off at the end of the year
4. You choose what colors to paint each room and you can update it accordingly to style and preference.
5. When you are 65 and older you can take advantage of the property taxes reductions.
6. If you are in the state of Texas you can take advantage of the Homestead exemption.
7. You can give the property to your heirs when you pass away.
When you rent you do so because it gives you the ability to be more flexible as far as location and being able to have the ability to choose where you want to go.
The benefits of renting are as follows:
1. Renting may be cheaper than buying a house, depending on where you live and how much you make.
2. If something goes wrong with your rental property, it’s not your responsibility to fix it, that’s the landlord’s job.
3. You can move whenever you want to move.
4. When you are renting you are only paying for the place for a set period.
5. Renting a place can be great if you are a student, a single person, a couple, or a retired person who doesn’t need a lot of space.
6. Renting might be good for you if you don’t want to have to do a lot of yard work.
7. Renting a place might be for you if you don’t want to be responsible for paying property taxes.
Conclusion
Some people believe that owning a property is the key to financial freedom.
They claim that it provides an opportunity to build equity and wealth, while others argue that it may not even be possible to get a mortgage in today’s competitive market.
In the end, homeownership has many benefits and drawbacks.
We need to understand what kind of benefits we expect from homeownership before we decide whether or not it is worth pursuing.
We hope this article has helped you decide on whether to rent or buy your next home.
If it did, please share with friends and family who could benefit from hearing about the benefits of renting vs buying a house.
And if you need any help in finding the perfect place for your needs, feel free to reach out to us!