Rent or Buy
To Rent or To Buy?
The age-old question: should I rent or should I buy? I am sure you have heard so many reasons to and so many reasons not to purchase. Maybe interest rates are great so it makes it more affordable to buy than it is to rent. On the other hand, maybe property values have declined so it makes more sense to rent in the meantime. Either way, a place to call home has so much value for many. If you break down the reasons to rent and the reasons to buy, you can find the option that is best for you.
If you are renting your home, each month you will pay a property owner a rent amount that will secure you your place to call home. There are advantages to renting such as typically when a property is a rental the tenant is not responsible for repairs to the property. This can be a huge relief to you when a water heater floods all over the basement or the air conditioning breaks down on a hot summer day. Property maintenance can be costly and if you are on a fixed budget without a healthy savings account, the burden of repairs can be too much. In addition, many rental properties include some utility bills like water or sewer leaving you only with electric and gas to cover. If you find yourself in a financial struggle, it is much easier to relocate than if you have purchased your home. You will not face foreclosure because the loan on the property is not yours. If it comes to the point where you will be facing eviction due to unpaid rent, you typically have more notice than you do in a foreclosure. If property values have been declining in your area, renting is a great option because in this case purchasing a home that has a declining value can be a bad investment decision.
On the other hand, purchasing a property to gain title to the property is the other option. In this scenario, you own the property and are responsible for its upkeep and maintenance. There is no one to call when the furnace stops working when you purchase a home. However, with a purchase of a home you can build equity and possibly sell the home for a profit if property values are on the rise. If interest rates are low, then often times taking out a mortgage to purchase property is less expensive monthly than it is to rent a similar property. In addition, when you own a home there are tax benefits such as being able to claim the interest you paid or the real estate taxes you paid as well.