Should you rent or buy your next home? It’s long been the debate for many. Buying is a big financial investment. But is it worth it? Or is renting nothing more than throwing away good money? Here are six points to consider when making this big decision.
We have had many posts over the past few months discussing how it’s currently a good time buy a home. Interest rates are at all-time lows, and you don’t need as much for a down payment as you thought. But perhaps you (or your adult children) are STILL on the fence: rent or buy? Here are six things to take into consideration:
- Rents increase: When you purchase a home and sign your loan documents, the amount you owe each month is relatively fixed. Property taxes and insurance can be variable costs. But rents are always on the rise. Landlords aren’t in the business of gifting you with a decrease in rent.
- Make it your own: The ability to customize, decorate and renovate is completely your choice when you own. As a renter, you are very limited in the changes you can make.
- Privacy: When you own, no one can enter your home without your permission. But as a renter, the landlord can access your unit in an emergency.
- Relocation: Historically, if you need to move quickly, renting has always been an advantage. But when inventory is low, you can sell quickly and likely at a tidy profit.
- Equity: This one is a no brainer. When you rent, you are building someone else’s equity. When you own, the equity you are building is your own.
- Tax advantages: Depending on the current tax laws, there are tax deductions as an owner but not as a renter.
If you are currently renting, what’s keeping you from buying a home?