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Should you buy or rent a home? The answer often depends on your finances and plans. When looking at renting vs buying a house pros and cons need to be weighed.
- What’s the best way to spend your money?
- How long are you planning to stay in your home?
- Are you changing jobs or possibly moving?
Renting vs Buying a House Pros and Cons Breakdown
Buying a home is one of the biggest financial decisions you will ever make. And money is an important factor when making this decision.
When buying a few items to be aware of are:
- The down payment amount.
- Closing costs, insurance and taxes.
- Monthly utilities.
- Ongoing home repairs – such as the water heater, plumbing and appliances.
But there are strong reasons to buy:
- Interest and property taxes may be deductible*.
- As you pay down the loan principle, you will build equity, which can be an excellent asset for securing a loan or a line of credit.
- Overall, most home values increase over time, which increases the amount of equity and your return on investment when you sell your house.
- Once you pay the mortgage off, the home is all yours.
When renting the advantages include:
- Your initial cash outlay will be smaller – often a deposit of a month’s rent.
- The money you save can be used for other investments.
- The landlord is responsible for repairs of things like plumbing or electrical.
- It’s easier to move quickly if you change or lose your job.
- You’ll never own your home, no matter how many payments you make.
- There are no tax advantages.
- Rent could rise or your landlord could sell the property.
It’s important to do what’s right for and your financial situation. Before deciding, do your research and create a list of renting vs buying a house pros and cons
*Consult a tax specialist to learn what interest and property taxes are deductible.