Renting Vs. Buying: Pros And Cons
The pros and cons of renting a house are important factors to consider when pondering the enormous life decision of whether you should rent or buy. In many hot real estate markets, housing prices have skyrocketed beyond what many people are able to afford, so buying a house is simply out of reach for many. Let's consider the pros and cons of buying vs. renting a home:
Pros of Renting vs. Buying
One of the pros of renting vs. buying is that you don't have to be confined to a particular place, giving you the advantage of location mobility. If your career sends you to different locales, you can easily pick up and move without being tied down by homeownership. Another advantage of renting vs. buying a home is that you don't have to come up with a large down payment as you would with purchasing a home. You simply have to pay the first and last month's rent, plus a deposit in most cases.
Simplicity is another factor to consider. When renting, you can locate your home and move in the same day, whereas closing on a house sale can take months of searching along with additional time spent during the closing process. Other benefits of renting a house include property repairs and maintenance. In most cases, the landlord is responsible for major repairs such as leaky pipes, roof leaks, and appliances. If you are the homeowner, all of those repairs and expenses fall on your shoulders. The landlord also has to pay the property taxes, homeowners association fees, and the mortgage on the property, while all the tenant has to pay is rent.
Cons of Renting vs. Buying
When considering this decision from all angles, you should also think about the disadvantages of renting. One downside to renting is that you never know if your landlord might raise the rent beyond what you can afford. Your landlord may also decide to sell the property, meaning you might possibly have to move even if you don't want to.
Another disadvantage of renting is that you might get a landlord who lives out of state and pays little attention to repairing things on the property. If you are a design aficionado and always dreamed about creating a home that expresses your own personal style, renting will limit you as far as making major changes such as changing the paint color or other permanent alterations. Even hanging pictures could potentially cause a problem if your landlord decides to keep your deposit due to holes in the walls.
Is Renting A Home Better Than Buying?
When trying to decide whether to rent a home or buy, you should explore rents and housing prices in your local market. According to CNBC, on average, home prices are up 14%, while rents have only risen 4% over the last year. This financial situation is a definite advantage in favor of renting vs. buying. The traditional advantages of buying a home, which include paying down your mortgage and gaining equity, property appreciation, and being able to deduct mortgage interest, may not be enough to offset the high price of homeownership.
Additionally, homeownership carries the added risk of being responsible for the mortgage. If you lose your job suddenly, you could also lose your home in a foreclosure. Many homeowners bought houses in a rising market, hoping the price appreciation would continue, but property appreciation is not guaranteed. Just ask anyone who bought a house right before the market crashed in 2008.
As you consider all the pros and cons of buying vs. renting, don't fall for the conventional wisdom that homeownership is better because it is a good investment. It may be, but sometimes it simply makes more financial sense to rent, rather than to own a home. For instance, you could rent a home and use the money saved for other investments.
Whatever your decision, HomeFinder is the perfect place to find your next home, whether you are renting or buying.