Renting Vs. Buying: What’s Best for You?
In the past, buying your own home was the American dream. Now, more and more individuals, couples, and families are opting to rent instead. How can you decide which option is right for you?
The Cost Factor
Whether you plan to rent or buy, money will always be the biggest factor in the decision. How much you can spend on your home will determine where you live, what kind of amenities you have, and your lifestyle outside of your home.
When choosing between renting and buying a home, it’s helpful to break down all of the basic costs and compare them. What would your mortgage payments be vs. what your rent payments are? What kind of space and features are you getting in exchange for that money? Are you considering an area where a home would be an investment that would earn?
It’s also helpful to think about more long-term costs. If you own your own home, whether it’s a house, condo, apartment, or townhome, you’re usually responsible for your own maintenance. If you’re not, there’s probably a fee associated with it. If you rent, maintenance is typically included in your monthly payments, but you face other costs like a security deposit, pet fees, and amenity fees that you wouldn’t pay in your own home.
There are many costs to consider, so using an online rent vs. buy calculator is a good place to start. These tools often take into account numbers you may not even think of, helping you gain a more rounded perspective of where your money is best spent.
How Long Will You Live There?
The permanence of your housing situation will be a big influencer on your decision to stay put or allow for flexibility. If you’ve got a job you love, you’re starting a family, have kids in school, or are just ready to settle down, then buying is probably your best bet.
If you look 12 months into the future and aren’t quite sure where you’ll be, renting a home is the better option. Buying a home is a lot of work and requires tons of paperwork; it likely isn’t worth it to turn around in a year and put in that or more work and effort just to sell your house and move. Even if your rent payments are more than your mortgage payments would be, the flexibility to move when your lease is up might be worth it to you.
Owning your own home means paying hefty property taxes and mortgage interest. However, these can also be claimed as deductibles on your tax return. Renting doesn’t affect your taxes nearly as much. If you’re thinking of buying your home, consulting a tax professional will help you prepare for your decision.
Is Yard Work Your Thing?
Buying a home comes with all sorts of built-in responsibilities. You’re in charge of maintaining your own home and property, and when a pipe breaks or the grass gets too tall, it’s up to you to solve the situation. With that responsibility also comes more freedom. If you love landscaping, gardening, or home improvements and customizations, having a home that’s completely yours is the right way to go.
On the other hand, if you’d prefer not to have to care for a yard and you love the idea of simply putting in a maintenance request through your property or landlord to fix whatever problem you have, renting is the method for you.
What Do You Like?
Ultimately, whether you rent or buy comes down to the way you like to live and the amount of flexibility you like to have. Neither renting or buying is good or bad, it just depends what you prefer. When you consider all of the factors in the rent vs. buy debate and how they relate to you, you’ll be able to paint a clear picture of your ideal living situation.