Should You Keep Renting or Buy a Home? Weighing the Pros and Cons

Buying a house is a big decision. Homeownership is a large goal for many Americans and has long been a part of our cultural mindset and economy. But how do you determine if you’re ready to make the switch from renting to buying? Below, we’ll look at the benefits and drawbacks of buying versus renting and the best way to determine which is for you.

Pros of Buying

Building Equity

Every time you pay your monthly mortgage payment, you build equity and own that much more of your home. You’re directly increasing the value of your home and contributing to your investment assets instead of paying for someone else’s property.

Creative Control

Owning means you have full freedom to change the property how you see fit. You will have more freedom to paint and decorate, renovate, and customize your home to fit your family’s needs.

Consistent Payments and Tax Benefits

When you have a fixed rate mortgage, you know exactly what you’re paying and how long you’ll have to pay those terms. While loans have interest payments as well, interest paid on a home mortgage may be a tax deduction you can benefit from. It’s best to seek the advice of a tax professional to see if this is possible for your specific situation.

Cons of Buying

Full Responsibility

You are both the landlord and the tenant when you own and live in a property you’ve purchased. You’re now responsible for property maintenance, repairs, taxes, and other related responsibilities.

High Upfront Costs

When purchasing a home, most people only think of a down payment. While this is an important expense, there are more upfront costs to save for such as closing costs, an appraisal, earnest money, and title insurance.

Less Mobility and Longer Commitment

There’s a reason people equate owning a home with “putting down roots.” It will be harder to take opportunities such as job offers in different cities or states. Buying a home requires confidence that you’re planning to stay in that location for several years.

Pros of Renting

Freedom to Move

If a lease ends and you no longer wish to live in the space you’re renting, you can easily pack up and move. There’s a psychological freedom that comes with renting and knowing that if you find a location that’s better suited for your needs, you can more easily explore those routes once your current lease ends.

Lack of Responsibility

While you’re responsible for the general cleanliness and upkeep of your unit or space, your landlord handles maintenance and repairs. If an appliance breaks, the tenant informs the landlord. The landlord then funds and schedules the repairs.

Cons of Renting

Lease Increases

A typical lease lasts for a year, meaning for 12 months, your rent price is fixed. When the lease is up, your landlord could increase the price or decide to sell the property.

Unpredictability

If you’re renting in a multi-unit building or home, you will most likely not have any control over who moves in next door. You may be woken up at early hours from noisy neighbors or hallways commotion.

Less Stability with More Rules

Renting means someone else makes the rules. Most rental properties have strict policies relating to types and sizes of pets, so finding an affordable unit that allows your pets can sometimes be a challenge. There are also restrictions on decorating aspects, such as painting or mounting shelves in a space.

So, Which is Best for You?

The housing market, your financial situation, and your family’s long-term goals are all competing factors when it comes to renting or buying. Have you found a city or location you can picture yourself in long-term? Do you have enough money saved to pay for your mortgage, house upkeep, and maintenance?

When you’re ready to plan for owning a house, be sure to contact us. You’ll be put in touch with a knowledgeable Loan Originator that can work with you and your unique financial needs to confidently find housing solutions that work best for you.