Advantages and Disadvantages of Owning or Renting
Renting Vs Buying a Home
Considering buying a home, but doubting if buying or renting is the right choice for you?
Think about the following before you sign that buying or renting contract.
Nationwide, 34.9% of occupied homes including houses, condos, and apartments were rented in 2010, up from 33.8%.
Advantages of Renting:
- Fixed Costs for the term of the lease.
- Not gaining equity but not losing either.
- When the lease is up you can just move.
- There is generally less work in maintaining a home or apartment.
- Smaller amount of “up-front” cash.
Advantages of Owning Your Own Home:
- Over time the mortgage balance decreases and equity builds, even if the value of the home does increase.
- The ability to remodel and redecorate the home to match your needs and desires.
- There can be tax advantages attached to home ownership. Consult competent legal and/or accounting advice for details for your situation.
Disadvantages or Renting
- No matter what happens with the value of the home you will never gain equity.
- Limited or no ability to personalize your living quarters.
- No tax advantage to renting- your landlord gets any and all tax breaks that are available.
Disadvantages of Buying a home
Equity may go up, down or stay steady.
If you want to move, home generally must be sold.
Work needs to be done by you or paid for by you.
Generally, a larger initial investment the down payment.
Things to keep in mind when deciding on buying a home vs renting.
Buying a home mean garnering equity.
Buying a home brings a sense of pride and accomplishment.
Buying a home brings a realization that you are part of a more permanent community in which you might be contributor to the well-being of others around you.
Financial obligation #1
When owning a home, each monthly payment is like putting money into savings account rather than giving it to the landlord when renting.
Financial obligation #2
Buying a home is also accompanied by some interesting tax benefits.
Responsibilities of Buying a Home vs Renting A Home
As a tenant in a rented home or apartment you have more freedom to move about the country.
Many small home improvements can add up to big dollars invested in upkeep expenses.
If you find you aren’t exactly thrilled with your new neighborhood, you may find yourself stuck until the value of your home increases enough to get back your initial investment. Can you imagine moving in to a new home and having a new born with next door neighbors that conduct band practice on a daily?
Before you consider buying or moving, keep in mind these tips. For help on deciding whether to buy or rent, please contact Nouman.
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