It seems that there is one question that those either working in real estate or contemplating getting real estate have always asked: Is it better to buy or rent a home? This question comes up time and again regardless of the economy and real estate market so let’s look at a few of the pros and cons for both.
One of the big pros with renting is the caretaking and maintenance of your home. Sure, you should always take care of your home but to not have to worry about some major items such as HVAC, appliances, roof, floods and the costs associated with those purchases or repairs – well, that seems to be a huge plus to me. It would be quite nice to simply make a call to the landlord when you walk into your home and suddenly the AC is dead on a day when it’s 95 degrees. Phew!
Another pro is the flexibility of renting. Let’s say you’re new to the area and not quite certain where you want to live. Renting gives you the opportunity to live in the community and learn a great deal about what it has to offer and how it benefits (or hinders) your family, work and lifestyle. It would be terrible to buy a beautiful new home only to find out the schools aren’t that great, there is not a lot of local retail or it is inconvenient to get to work because you didn’t know traffic patterns.
Also, let’s not forget that often times rent is a lower monthly payment than a mortgage payment…at least that’s what we’ve always thought. These days, as many people suffer hardships with the economy, some areas have developed high demand for rentals as families can no longer afford their homes. High demand equals…you got it – higher rents. So if that is the case for you, let’s take a brief look at the benefits of purchasing a home.
You always hear people say that to rent is to throw money out the window. Ever wonder exactly what that means? The rental payment you make is just that – a rental payment. A mortgage payment is much greater. At this time, you are able to right off all the interest associated with your mortgage payment, some fees associated with closings and you’re making a payment towards full ownership of your home giving you equity. Those are some big savings and advantages!
Another nice thing with buying a new home – you’re the first owner. You’re the first one to use your appliances, enjoy your yard or deck, and yes, I’ll say it – use your bathroom! You don’t have to worry about who the previous owner or occupant may have been because everything really is brand new, not “like new”.
There’s the design aspect to. You say you’ve always wanted a jetted shower? Well, if the rental doesn’t have it, I doubt you’re going to invest in one given that you’re not taking it with you when you leave. But with a new home purchase, go for it because it’s yours forever. You get to design your new home so that it fits your needs and desires instead of living with something where you just have to “make it work”.
Ginnie Mae (the organization that guarantees mortgage-backed securities and is supported by the government) has published a fantastic guideline to help you determine if you should rent or buy because the bottom line is what’s going to work best for you and what do you want out of it. Check out their page and use the “buy vs. rent” comparison chart, the buy vs. rent calculator and also determine what is affordable for you.
Good luck and Happy House Hunting!