rent vs buy

How do you know if it is better to buy or rent a home?

This week our real estate professionals delved into the advantages of both buying and renting. We learned that there is no perfect option, because each individual situation is different. Renting may be better for those with jobs that cause frequent relocation, while buying may be better for those who want to personalize their space and set down permanent roots.

Below we have broken down the main advantages of both renting and buying a home. Hopefully this insight from our legal professionals can help you figure out which is the right choice for you!

RENTING

1) Flexibility

Renting allows a freedom that home ownership just cannot offer. Relocating and moving are both much easier when renting than they are if you own. Selling a home is not usually a quick process, and if your job demands a quick move, you could end up in a difficult situation. David Bakke of Money Crashers explains:

“…if you enjoy the flexibility of being able to move around whenever you want, then renting makes the most sense. If you have a job that may require a good bit of relocation, renting is also a better idea, especially if your employer doesn’t cover relocation costs.”

Moving is expensive even when you don’t have to deal with the complications of real estate. Renting will make it both cheaper and easier.

2) Less Responsibility

An undeniable benefit of renting is less responsibility. If your water stops working, you can simply call on your landlord, and they are required to fix it for you. Alexandra Wolf of Homescout Realty breaks down this advantage of renting simply:

“You have less responsibility for repairs and maintenance. ”

That can mean a lot less stress, especially if your landlord is responsible. However, irresponsible landlords can make your living situation difficult, so be sure you know what you are getting into before signing a lease.

3) It’s Cheaper

Renting is generally less expensive and can help you save money for a down payment or build-up a better credit score for eventually buying. Ryan Wiggins of Tenants.com gives us a better idea:

“A home is not always a wise investment, particularly in these tough economic times. If you are in fear of pay cuts at your job or are unsure of the position you are in, the wiser decision might be to hold off on purchasing a house and focus on saving the money that would go into that purchase for other investments.”

Paying rent each month can be costly, buy you can opt out easily if your financial situation changes, and find somewhere cheaper to live. Mortgages are not so forgiving.

HOME OWNERSHIP

1) Long-Term Solution

A home is an investment, and you should plan to keep it for many years. You have a lot more control when you own your home, and can choose something that suits your lifestyle–if you plan carefully. Your home should be in an area that you can foresee residing in for years to come. T.J. Rubin of Fulton Grace Realty explains further:

“If you think you will be staying in that home for long time, you should buy. If you find a good home in a certain neighborhood you want to live in/work in and don’t want to be beholden to a landlord, [buying is a good option].”

Landlords can be a pain to deal with, but owning your own home means you are your own landlord.

2) Good Investment

Paying rent to yourself is another huge advantage of home ownership. It is beneficial to have your monthly payment going to your own mortgage rather than your landlord’s. Elizabeth B. Hotz of Denver Relocation Realtors shares:

“Write off the interest in your taxes, build equity, and make it your own by painting or remodeling. It’s like living in your own bank account.”

Homes are expensive, but so is renting. If you’re going to be paying the money anyway, it might be better for you to be paying into your own mortgage.

3) Freedom to Personalize

When you rent, you even have to be careful when hanging art on the walls. Home ownership allows you to transform the space in any way you can afford, from painting to adding a new deck. Kirk McGary of Real Property Management expands:

“Home ownership gives you more independence and freedom to design and transform your space.”

The only rules you have to worry about when you own your own home are city building codes. Putting pins in the wall doesn’t have to make you nervous when you own the walls.