With interest rates staying low and rent increasing, many renters are thinking about buying a home. Buying a home is a major decision and it may or may not be right for you. Here are some pros and cons for both renting and buying. Your decision may depend on your lifestyle and career goals.
Renting Pros and Cons:
Pros:
- Freedom to move around
- Landlord takes care of maintenance and repairs
- Usually housing expenses won’t change until your lease renews
- You can live in different areas and decide where you want to be long term
Cons:
- You don’t build any equity – but your landlord does
- Rent can go up every year
- Landlord may decide to sell and then you need to move sooner than expected
- You may not be able to paint or change your home to your style
Buying Pros and Cons:
Pros:
- You build equity over time
- Home value may increase (usually does)
- You may have tax benefits
- Sense of home stability
- You can make as many changes to the home as you want – some may require permits but painting, gardening, minor remodeling can be done
Cons:
- Closing costs can be high
- You will be responsible for maintenance and repairs
- Harder to move quickly
- Recent tax law changes may cut into tax benefits
- May be harder to save up money for a down payment
One of the first questions to ask yourself is how long are you going to be in this area? Do you want to put down roots or are you thinking about moving to another area? Look at the cost of renting vs buying. Rents are going up but interest rates have been great. Would it be cheaper for you to buy a new home or continue to rent?
For many, it’s a personal decision based on their current situation. Some people want the flexibility that renting gives, but others want to know that they are gaining equity and in turn saving money. In a first time homebuyer class I teach, the answers vary but frequently come down to some of the same pros and cons listed above! Having your own space, being able to paint or garden were always popular answers as to why someone wanted to buy a new home. With current interest rates, it’s a great time to buy a home. However patience is required based on the number of homes available in the area!
Leslie Vanderwerf, NMLS ID#335509, Cross Country Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
