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To Rent Or To Buy?

By Colleen Colkitt

If you are interested in buying a home but aren't sure if renting is better, or if you're renting a home and you want to make the transition to buy, here are some tips for deciding what to do! There are pros and cons for both renting and buying properties, so make sure to look at all possible angles of the situation before deciding or signing a thing.

Pros of Renting

Depending on your lifestyle, renting a property might be a better option than buying a house. If you like to travel or plan on moving frequently, this is definitely a better way to go because it allows mobility and flexibility due to your agreement in the lease. Finding places to rent in attractive cities is easier as well, and if you are a spontaneous person and want to move for a new job or relationship it's much easier!

Typically landlords are responsible for making repairs to facilities and systems, and there is no burden placed on you! The renter does not assume financial responsibility for most damages or disrepairs. You don't have to worry about general upkeep or following safety and fire codes because the landlord is in charge of all this.

Cons of Renting

Although, someone who likes to decorate and put a unique spin on a place, renting might cramp your style. The renovations, painting and changes you want to make may need to be approved by the landlord before you go through with anything. There are restrictive rules pertaining to noise and visitors sometimes as well. Signing a lease will only guarantee you to live in that space for a certain amount of time, and unless you buy a house you won't be as secure about your time in the home.

There is no tax deduction, and the monthly rent is most likely not a fixed rate. Typically rent increases from year to year.

Pros of Buying

Obviously, if you're looking to settle down and start a family, buying a home has security benefits. The value for owning a home has gone up in the past few years, and there is a certain freedom that comes with purchasing a property. As the owner, you are at liberty to make any changes or renovations without running the risk of violating a lease or upsetting a landlord. You can decorate however you like and paint whichever colors you want! You can truly make this space your own when you buy a house. There is generally more privacy when buying a house and your cost is predictable and stable over the years. Laying out roots to build a family will help connect you to your community and give you the opportunity to make lasting relationships.

Taxes play a major factor as well because homeowners itemize their deductions to save on taxes. Putting home mortgage interest, property real estate taxes, state income taxes, gifts to charity, personal property taxes, moving expenses, and medical and dental expenses separate on tax forms helps to reduce taxes paid.

Long-term equity is a factor that may or may not be a benefit to buying a home. Each situation and property varies, so determine what your home will be worth years down the road to make sure owning the house will be a good idea even in the future.

Cons of Buying

Most people can't just pay for their home in cash. At least, not right away. When buying a house, a person must consider their potential to get a mortgage loan. Bad credit may make it more difficult to get a preferred loan, and the financing of buying a house takes longer in the buying process. It is important to figure your standing with purchase price of the home as well as the home's down payment with your annual income and debt, property tax rate, home insurance rate, interest rate and duration of loan.

Monthly fees include mortgage payments as well as down payments, property tax and homeowners insurance premiums, and closing costs. Compare these prices to that of a rented property to see if it's to your benefit to rent or buy because buying a home is a huge financial commitment and sometimes employment or health issues can interfere with mortgage payments.

Renting Vs. Buying

Before deciding anything permanent, consider the location and area of the property, as well as the duration of your stay in that particular home. Make sure to calculate the cost benefits for staying in the home long-term as well as short-term, just to make sure renting is better or vice versa. Calculate the rent of a place for a certain amount of time, and compare it against the price of a home and mortgage payments as well, factoring in any repairs you may have. There are pros and cons for renting as well as buying, and each situation varies from person to person or buyer to buyer.

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