THE PROS AND CONS OF BUYING VS RENTING A HOME
The current 30-year fixed interest rate on a home mortgage is hovering around the 3.50% figure. Meanwhile, rents in many major urban areas are skyrocketing due to the always-present laws of supply and demand.
Which is better, buying a home or renting? As the nation slowly recovers from the housing decline of the past few years, many seeking a residence are diving into home ownership more quickly than they had planned, while others remain on the fence waiting to see what the real estate market will do.
There is no right answer to the question should you buy or rent. There are pros and cons to both sides of the argument. Let’s take a look at some of those arguments now.
PROS OF RENTING
- No home maintenance required
- Much easier to move should you need to do so; give 30-day notice and leave
- Avoid possible decline in market price
CONS OF RENTING
- Rents can be increased and in fact are increasing in many areas
- Renting is not an investment and you do not build equity
- There are no tax benefits to renting
- Painting and remodeling are only allowed if the owner approves it.
Now let’s take a look at the pros and cons of owning a home.
PROS OF OWNING
- It is an investment and you can build equity
- Many tax incentives for homeowners
- House payments stay stable
- Your home may be used as a future investment, using it as rental income later on
- Committing to buying a home is committing to setting roots and becoming part of a community
- Decorate as you choose.
CONS OF OWNING
- You pay for your own maintenance
- Selling your home quickly may be difficult, depending on the market
- You will pay property taxes
- Your home could lose value as we found out five years ago.
- Buying requires a large down payment
- Homeowners insurance is mandatory if you have a mortgage
There is no doubt that this is an attractive time to buy a home. Prices are down as are interest rates, and the decision to buy now could save you tens of thousands of dollars over the life of your mortgage. There are some great values on the market right now, so those who see it as a long-term investment and who have plans on staying in place for awhile really should consider buying over renting.
Here are some questions you should ask when making this decision:
- How long will you live in the new house? If you plan on staying put for a long time, then buying makes great sense.
- Can you afford to buy?
- What are the costs of buying?
- Do you have good credit?
- What are your future plans? Do you see yourself there in ten years? Are you planning on having a large family, or is your family going to shrink in the near future?
Yes, this is an important decision. We are, after all, talking about the largest investment most people will make, an investment that will have huge repercussions over the years. Sit down and consider all factors.
What I can tell you as a real estate expert is this is the best time to buy that we have seen in many, many years. The market is recovering, the interest rates are very low and all indications are that prices will continue to rise over the next few years. If you are considering buying and you have the ability to do so, this might be the time to take the plunge.
Ikem Chukumerije is the CEO of SportsRelocation.com. SportsRelocation.com assist players/coaches of all professional sports leagues including the NBA, WNBA, NFL, MLB, NHL, and entertainers relocate nationwide by servicing their Real Estate & Relocation needs. Ikem Chukumerije is licensed to practice real estate in New York, California, Nevada, & Florida. SportsRelocation.com operates nationwide and provides our elite services in all 50 states and internationally.