Should I Rent or Buy a Home: An Overview
It’s likely that you have some questions about homeownership if you’re considering it and we’re here to help. It can be intimidating to take the first steps out on your own, or to be living with your parents and wanting something more independent, either way, there are many things to consider.
You must consider where you see yourself living and what you can afford when deciding whether to rent or buy a single-family home. The question then becomes whether to rent or buy. It is important to consider all the options before making a decision when it comes to this discussion since there is no right or wrong answer.
To help you with this decision, we’ve gathered the reasons and benefits of renting, as well as the reasons and benefits of buying.
Pros and Cons of Renting a Home
In many cases, people choose to rent because it is more affordable than owning a home. The main advantage of renting is that there are no upfront costs. However, you also don’t gain equity. In addition, there can be times when monthly rent costs are higher than monthly mortgage payments.
Another reason why someone may choose to rent is that they’re unsure of where they want to live or unable find a place that fits their needs. If you are unfamiliar with the area, we recommend that you rent for the time being so that you can explore the neighborhood and determine which area is right for you. You may not be able to find an affordable home within a reasonable distance of your neighborhood or work place.
To give you some more insight on whether or not renting is right for you, we have list of pros versus cons to help you decide:
Pros of Renting Property:
- No maintenance costs or repair bills
- No real estate taxes
- Lower upfront costs
- Flexibility as to where to live
- Protection from potential decrease in property value
Cons of Renting Property:
- Rents will most likely keep rising
- Potential for being evicted if the owner wants to sell
- Paying into someone else’s mortgage instead of building your own equity
- Restrictions in place (ex. no pets, no renovations, etc.)
Pros and Cons of Buying a Home
There are plenty of advantages to owning your house. If the idea of homeownership is becoming more appealing to you, it’s important to understand what you might be gaining (and losing) once that property deed is in your hands. We’ve compiled a comprehensive list of pros and cons of buying a house to help you decide.
One of the main reasons that people choose to buy is for the stability and peace of mind that comes with owning the place you live. This means you are not at risk of being put in a situation where the landlord wants to move their parents into the basement suite and you have to leave or having to deal with increased costs if you go to renew a lease agreement.
For others, the benefit of buying comes in building up equity and ensuring that nest egg for your future. When you choose to rent, you are paying into someone else’s mortgage and into their future but when you work towards buying your own home, suddenly all that money you invested is going to your future instead. This is an extremely important aspect to consider in today’s age when many are having trouble with the idea of saving for retirement.
To give you some more insight on whether or not buying is right for you, we have list of pros versus cons to help you decide:
Pros of Buying a Home:
- Freedom to renovate or modify your home as you wish
- You are building up equity in a safe, secure investment as you pay down your mortgage
- Potential for additional income if you have a rental suite
- Stability and peace of mind from being in control of your investment and owning the place where you live
Cons of Buying a Home:
- The risk of losing home value when you sell
- Responsibility for ongoing costs, including mortgage principal and interest, property taxes, insurance and maintenance
- Monthly payments can increase if interest rates go up at renewal time
- Possibility of unexpected and potentially costly repairs
Regardless of whether you choose to continue renting or make the leap to owning your own home, the most important factor is your financial security. Getting the right information and looking into all the options will ensure that you are making the best decision for yourself. And, of course, be sure to contact a mortgage professional today to see if you can make the leap from renting to owning. If you have any other questions, feel free to reach out to our team!