Buying vs Renting a House: What are The Pros and Cons
If you go through the
The thought of purchasing a home will bring several questions into your mind. Questions like if it is really necessary to buy a home; if your income is going to grow; if you are going to stay in it long enough to benefit; if there is enough money to make the purchase; if you are really ready for the responsibility and so on.
Advantages And Disadvantages Of Homeownership
Before you purchase a home, it is important to consider how the purchase is going to affect your lifestyle and finances. You have to review the advantages and disadvantages of becoming a home owner before making the commitment.
The Advantages Of Owning A Home
- It increases value, provide a nest egg for the future and builds equity
- Gives you greater privacy
- Your costs are more stable and predictable due to the fact that they are based on a mortgage with a fixed rate.
- The property and interest tax portion which applies to your mortgage payment is a deductible tax.
- It ties you to your community, bringing with it pride
- You have affordable options at your disposal such as buying a low cost manufactured home
Disadvantages Of Owning A Home
- It is a long term financial commitment
- You are responsible for the maintenance of your home. This will include repairs which are inexpensive like a broken toilet being fixed to costly and complex ones such as replacing the furnace.
- When you purchase a home, it ties you to a community, making it hard for you to just pick up and move
Pros And Cons Of Home Renting
Depending on your financial situation and what you prefer as your lifestyle, there are many advantages to renting which include:
- It is cheaper in the short term. The money you pay will be cheaper as compared to what you pay when buying. Your rent might cover utility bills thereby offering you a saving.
- There is flexibility when it comes to renting with the leases going for 12 months. So if you are on a job which requires you to do frequent moves, renting could be the most desirable option.
Financial Disadvantages Of Renting
- There is no tax break when it comes to renting. It will be hard for you to claim any deductions for mortgage interest and property taxes when it comes to filing your tax returns.
- The costs for your housing are not fixed as with the fixed-rate mortgage. Every year, there will be a difference in your rent making it hard to plan for your budget.