Should you rent or buy a house? Here’s a comparison…
Should you rent or buy a house?
Renting or buying a home is among the most critical financial decisions. For many, owning a home is a lifetime fulfillment. Based on financial position, your plans, and personal preferences, below are the pros and cons to help you make this important decision.
Renting a House
A good number of people these days are ruling out home ownership because it simply doesn’t make sense to them.
- Renting cost is lower per month/year as compared to buying a mortgage, which exerts more pressure and responsibility on your income.
- You can choose from a variety of apartments, condos, townhomes and single family homes, depending on your financial capacity, and your rent fee often covers all costs associated with the home.
- You are more able to change homes easily since most leases will run for one year. If your job or family requires relocation, renting would be a suitable alternative.
- Your property owner will be responsible for carrying out nearly all the repair work and general maintenance.
- You will not enjoy tax breaks, and you cannot claim tax deduction on mortgage interest
- Your renting costs aren’t fixed and may change from year to year
- Minimal security and privacy
For many, home ownership sounds like the best thing in life. However, taking a keen check, it has its own pros and cons too.
- Home ownership provides a greater sense of security and privacy
- Home values typically appreciate, build equity, and provide security for the future
- Mortgage costs are more stable and predictable since they are often based on fixed-rate terms
- Homeowners enjoy tax breaks and deductions on mortgage interests
- Home ownership subjects you to a long-term financial commitment
- You’re responsible for all maintenance work, including repairs on the heating system and plumbing among others
- Owning a house ties you to one neighborhood and it’s not easy to relocate
- Although mortgage payments are usually fixed, they’re generally higher than rent payments and include other fees like property taxes, homeowners insurance and homeowner association fees
- Borrowing against your house can be tempting and might leave you financially insecure
Buying a home is a major investment. For the savvy woman, we recommend weighing all the options before making the decision!