Here are some expert insights into the pros and cons of renting versus buying.
Not everyone has the goal to purchase a home, and that is okay! Everyone has their own financial goals, and I’m here to help you achieve it either way.
So let’s start with the positive side of renting.
1. Flexibility- you do not have to commit to a 30 year mortgage, and have the ability to move at any time.
2. Low Upfront Cost- You do not need a down payment, or to pay closing costs. Usually you only pay a security deposit.
3. Limited Responsibility and Maintenance- You don’t have to worry about large expenses if something were to fail.
Now, for the positive side of buying.
1. Equity- Your home will appreciate over time, and that $100,000 investment into purchasing a home 10 years ago, may be worth at least double, or more !
2. Stability and Permanence- Your interest rate, and monthly payment will generally stay the same. The only thing that will change is taxes and insurance. But, no one can give you a notice that you need to pay $100 more each month like they can if you rent.
3. Tax Benefits- You can deduct your mortgage interest and property taxes from your taxable income.
Both renting and buying sound pretty great, and have their benefits, depending on where you are at in life and where you want to go. What are the downsides to both?
Renting:
1. No equity- You are paying for your landlord’s investment and helping them increase their own equity to make more money.
2. Restrictions- Most of the time you have to ask for permission before making any changes, or you have limitations on pets, decor, etc.
3. Instability- Rental prices increase year over year. Landlords must honor the terms of the lease, but that doesn’t stop them from raising the rent on you at the end of the term, or you are stuck trying to find a new place.
Owning:
1. Huge financial commitment- It is a 30 year commitment to one place, and the upfront cost to own is heavy.
2. Maintenance and Repairs- It can be expensive to own a home, especially when mechanical systems fail, you have to foot the bill.
3. Limited Flexibility- If you want to travel, you are tied to one place…. Unless you become a landlord, rent the home out that pays your mortgage and more, and then you have the ability to travel, or even purchase another home!
So, at the end of the day, make sure you are thinking of what is best for you in the now, as well as the long term. If you are someone who doesn’t like to stay in one place for too long, continue to rent and do as you want. But, if you want something stable that increases in value and will pay for itself, buying a home would be a great option for you.
As always, reach out with any questions, and I’d be happy to sit down with you and discuss what the best option for you is!
–Amber Fleck is a Realtor with Nest Shenandoah Valley. As someone who chose to plant roots in the Valley, Amber loves to welcome people to the area and share all of her favorite hidden gems. Because, ultimately, she believes you should love where you live!