Buying vs. renting a home is the age old debate. Any homeowner may tell you that renting is a waste of money. Any renter will tell you when you buy you’re stuck in one place and you better learn how to use a wrench. Both of these opinions are right in their own way. However, the one which is more pleasant to you depends on where you are in your life now. If you are debating buying vs. renting a home, here are the pros and cons of each.
Renting is transient. Yes, many people, especially in big cities, will rent for years. However, at the end of every lease term you can go. With renting you can leave. If you are just starting out in your career and you are not sure if you will be required to travel in order to climb the corporate ladder, then renting may be the choice for you.
Another plus side to renting is that you do not need to worry about home maintenance. If something breaks in your apartment, you call your super. If it snows, the super is responsible for plowing the parking lot. There is a certain peace of mind which comes from having someone to call in case of a home repair need.
When you buy a home you are making an investment. You are buying a property which has value. If you put in renovations and care to the home then the investment will increase. When you are ready to sell you may get all or more of the money back which you put into the home. It is this investment which many find valuable when it comes to buying vs. renting a home.
Buying a home is a possible positive choice if you know which neighborhood you want to live in. If you are ready to plan a family and need to get into a good school system, buying a home can give you a sense of security.
The Cost Comparison
When it is time to rent or buy you have to manage the initial cost over the long term cost. When you rent you typically need first and last months’ rent, a security deposit and a possible realtor fee. After you have that amount, you are set to move in. In buying you need long term financing, the large down payment and the closing costs. Renting is an easier upfront option.
If you are set on buying a home, you may want to rent right now if you do not have the upfront costs ready. You want to have good credit, a sizable down payment and you should know where you want to live. Renting can be a better option when you are still starting out or when you are saving for the big move. Buying is perfect when you are ready to plant roots and make an investment.