Whether you buy a real estate or rent the place where you live, it is a major decision. For a few people, it would have to be the biggest decision in their life. It affects your savings, your lifestyle, and the size of savings you accumulate over the years.
People have different intentions for buying or renting real estate. Those who are financially stable, prefer to own the place, and better off renting. They think, owning the real estate or home is a big investment that will grow with time and also as a source of tax deduction.
On the other hand, people also intend to rent all the time to avoid complexity and responsibilities even though they will have a larger net worth over time if they buy a place. For some people, renting comes down to what they can afford at the moment.
Sometimes, a long-term renter waits for long to buy until he/she could afford to stay in the neighborhood. They think they will fall working with savvy real estate agents and lenders.
Well….it is confusing to answer Rent vs Buy and undebatable but when considering Renting vs Buying, here are few questions to answer:
What and how can you afford it?
How long do you plan to stay?
Flexibility or stability?
What are your family goals, career, or financial condition?
Will you bear the expenses of repairing/maintaining cost?
Owning a home is a blessing, brings in substantial benefits such as a sense of stability, the pride of ownership, belonging to society, tax deduction, and equality but you yourself have to take care of repairs and maintenance work.
Contrary, renting offers you the ability to predict your monthly expenses, flexibility, and one of the tangible benefits is, it offers you, someone, to handle the repairs but you will have feelings of not belonging to the community and you won’t have pride of ownership.
Conflicting to popular belief, owning doesn’t mean that you are always building wealth in the long run, and renting doesn’t mean that you are throwing the money every month.
Renting means, you can move to other places without bearing extra expenses each time your lease ends but remember, it also means you could have to move sometime spontaneously when your landlord decides to sell the property.
One of the biggest and famous myths about renting is, you are throwing away money at the end of every month. It is not like that. Remember, you need a place to live, definitely, it will always cost you money like or not. Secondly, it is true that you are not building equity with monthly rent payments, you are also not building equity with much of the money you will put into owning the home.
When you are on rent, you know how much exactly you are going to spend each month. But as a renter, maybe, sometime you may face unpredictable rent increases each time when your lease is up for renewal but not if only you live in a city with rent control. But if you live in a posh area or in a desirable part of town, rent increases can be steep.
The renter gets no mortgage tax deduction at all. But they can take the standard deduction that’s available to all taxpayers.
One of the big advantages of being a renter is, you are free from each kind of repair works. Your landlord will take care of it but of course they may not be done as quickly are you wish to be.
Homeownership will give you a sense of stability, a great feel of being the part of the community, and pride of ownership. But real estate is a non-liquid asset. When you have to move, you may not be able to sell when you want if the housing market is down. Even if market is not down, there are very significant transaction costs when you sell. When you own, it will cost you a lot if you change your mind to move somewhere else. Contrary to owning, being renter, it is easier to move where you want to.
The most important thing is, the overall cost of homeownership tends to be higher than the cost of renting, even if the monthly mortgage payment is similar to or less than the monthly cost to rent.
The following list is of those expenses which you will be spending as an owner but not as a renter.
Here is my final conclusion….
Money is not only the factor to choose this option or that, your comfort and your vision of life also matter. So don’t rely on those who always favor owning real estate or on those who think renting is just throwing away money.
So ultimately, the decision to rent or to own is not just financial but also emotional…
If you are ready to start your buying or selling process
give me a call at 864-640-0041 -
I´m happy to answer all your questions.