Renting vs. Buying

Renting vs. Buying 

Deciding whether owning or renting is right for you, you need to consider your finances and lifestyle to select the best option for your situation. Homeownership has its benefits, but buying a home also means taking on the risk and expenses involved. Being a homeowner comes with a lot of responsibility and if you have always rented there are a number of things that you might not realize go into owning a home. While buying a home is expensive, it's often the best option for a family or individual. I put together a guide for anyone considering buying or renting a home, here are a few questions to ask yourself.

How long do you plan to stay?

Consider how long you plan to live in that exact place. If you plan to stay at a place for less than five years, renting may be the better option. But, if you plan to stay for a while, owning a home can be a great investment. Also, if you are unsure where you will live in five years, consider what you will do when it's time to leave. Do you want to go through the process of selling your home, or maybe using it as a rental property, or wait until your lease has expired and simply move out? 

Responsibility

When you rent, your landlord is generally in charge of making sure everything is taken care of if anything needs to be repaired. Also, you won't have to pay for the repairs.  When you own your home the upkeep and the outside maintenance will be your responsibility. Shoveling snow, mowing the lawn, fixing repairs will be all the tasks you take on. A home warranty may alleviate some major expenses and risk, but that still costs money. 

Do I have emergency funds?

Your down payment is not the only thing you save for when becoming a homeowner.  Closing costs are associated with buying a home which is very substantial. You will also need money to cover the unexpected. If you do not have adequate savings you might face some financial consequences in the future if you have a major issue, such as a damaged roof or a foundation issue.

Control

Owning a home allows you to have a lot of flexibility in how you want your house to look. You can remodel, add an additional room, or even repaint the walls. Being a homeowner makes you the decision maker.  Renting only provides you with little control over your place. Most renters do not have the option to change the colors of their walls.

What are the benefits?

Renting a home is convenient, you are not responsible for keeping up with maintenance. If you have any issues the landlord will take care of it. You wouldn't have to go through the process of buying or selling your home, you can simply leave once your lease has expired. Homeownership has several major benefits. Your mortgage payments are collateral on your home. You will eventually get that money back, as long as your home maintains or increases in value. The satisfaction of being in charge of your home and not needing the approval to make an interior or exterior change. Also, if you live in the property long enough, you eventually won't have to make any more payments.

Decisions

Renting or buying a home is an important decision to make, and you'll need to think about long-term in order to determine the best decision for you. Make sure you are in a strong enough financial position to support a mortgage and upkeep of a home if you consider buying. There are pros and cons to both scenarios, do research before you decide to select the best option for your situation.