Renting vs. Buying a Home
Are you considering a move? Familiarizing yourself with the key differences between owning and renting a home will help you choose the option that’s right for you. Ultimately, it comes down to a combination of personal and financial factors. Determining which of these factors are most important to you will help sway your decision one way or the other.
Owning a home gives you the peace of mind of having a permanent place to live. When you rent, there is no guarantee that your lease will be renewed. If you’re planning to put down roots and stay in the same location for a while, owning a home will provide more stability than renting.
Renting gives you the ability to easily pack up and move once your lease is up. If you own a home and have to sell it before you leave, the selling process can be long and make it difficult to relocate, especially if you are on a time crunch. As a renter, you’re not responsible for finding a new tenant to take your place after your lease is over. If you value the freedom to chase career or educational opportunities as they arise, renting may be better suited to your needs.
Renting can give you access to neighborhoods and properties that may otherwise be out of your price range. If you’re buying a home and have to stick within a strict budget, it might limit your search. If you’re unable or unwilling to compromise on location, renting might be your better option.
The type of mortgage you wish to pursue will give you a good general idea of how much you need to budget for over time to be able to afford a home. Rental prices fluctuate frequently, which can make a long-term rental difficult to budget for.
Renters’ expenses are relatively simple: rent, utilities, and renter’s insurance if required. In addition to mortgage payments, homeowners need to factor in homeowner’s insurance, property taxes, and condo or homeowners association fees, if applicable.
Homeowners have the freedom to renovate and customize the property to their liking. Renters are typically limited by the restrictions set by the landlord. If you love renovations and do-it-yourself projects, home ownership might be a better match for you.
As a renter, most maintenance needs and repair issues are the responsibility of the landlord. As a homeowner, the responsibility falls on you (at your expense). If the thought of having to pay for a major repair stresses you out, you may be better off passing that responsibility and expense to a landlord.
Homeowners have the option of renting out their property to generate additional income, if needed. However, renters can take the money they otherwise would have spent on a mortgage and invest it in order to grow their wealth.
Homeowners can benefit from a rise in property value over time if they resell their home, although properties can also lose value over time. Renters do not benefit from a rise in property value, but they also do not suffer a loss if the property loses value over time.
Are you ready to buy a home? Finding the right home is the first step, finding the right mortgage is the next step to set a solid foundation for successful homeownership. Robins Financial offers a variety of mortgage loan options, as well as expertise to help you with the decisions you need to make along the way. We offer Home Buying Calculators to help you determine how much you can afford and what your monthly payments might look like. Start your mortgage process today by applying online, or make an appointment with one of our Mortgage Specialists.