Many people have the dream of buying and owning a home. It’s likely the biggest purchase you will make in your life, and you will have to carry a mortgage with you for decades in most cases. Choosing to buy a home is a huge decision, and it’s one that people don’t take lightly. They want to know whether buying is right for them or if they should continue renting.
You’ll find that there are pros and cons to each of these options, and the answer will be different for everyone. Your personal finances will be one of the major elements you will have to consider, but it isn’t the only one.
Buying a Home
If you feel that buying a home might be the right choice, it’s time to look a little deeper into the pros and cons. This can help you make your decision on whether it’s the right time for you to buy or not.
When you buy a property, you have the feeling that your money is going toward something rather than just being given to the landlord. When you pay your mortgage each month, you are one step closer to fully owning the home.
You will also find that homes tend to increase in value over time. Of course, the market and how well you maintain the home will affect its value. Typically, though, investing in a home is a smart move because the home will be worth more in a few years.
Owning a home also provides some tax advantages. Property taxes, for example, are deductible. Mortgage interest will also be deductible when you are filing your tax returns each year.
When you own the home, you can renovate and decorate it how you like. You don’t have to worry about what the landlord will and will not allow. This includes having pets or painting the interior of the house in colors a landlord might not permit.
Typically, you will find that you also have more privacy when you own your home. Owning a home is the dream for many people, and it could be right for you.
Of course, this doesn’t mean that it’s all sunshine and roses when you own a property. There are some potential cons to consider, as well.
If you decide that you no longer like living in the neighborhood for one reason or another, or if you have to move for work, it’s not as easy as just finding a new place to rent. You have to sell your house, which can take months or longer.
You’ll also find that you have to handle quite a few more expenses when you own your home. You have to pay for homeowner’s insurance, property taxes, higher utility bills, and HOA fees if your community has a homeowner’s association. There’s also the maintenance of the property to consider. When you own, it’s your responsibility to handle those issues. You can’t simply call the landlord and let them know.
Renting a Home
Maybe you feel that you would rather continue renting. Many people opt for this, but it’s just as important to look at the pros and cons of renting. Let’s get a closer look at what you can expect as a renter.
When you are renting, there are some benefits. You can move far more easily. As soon as your lease is up, you can move out of the home and find a new place to live. This makes it easier for those who like to move around to different cities or who might have to travel because of work.
Additionally, when you rent, you don’t have to worry about paying maintenance. All of the maintenance will be handled by your landlord. This can reduce expenses and ensure that you never have to worry about things that go wrong with the property.
Renting brings with it some cons, as well. For example, the rental rates can and do increase over time. This means you’ll be paying more and still won’t own your place. There aren’t typically any financial incentives to renting. You don’t have the freedom to renovate the property, and you are subject to the rules that the landlord puts into place.
Determining What’s Right for You
Are you truly ready to buy? You have quite a few things that you need to think about. While buying means that you will own the home, not everyone is in a financial position where they can purchase a home. Look at your finances and make sure you can pay for the mortgage, maintenance, insurance, etc.
Make sure that you have good credit, so you can get a better interest rate on your house and get approved for a home loan. You don’t want to have a lot of other debt when you try to take on a mortgage.
You also have to think about how long you want to live in the same area. Is the neighborhood where you are considering buying a place that you could see living for at least five years? Do you prefer being able to move when you choose and don’t necessarily want to be tied to a place if you can’t find a buyer for your home?
In some cases, it might be better to continue improving your credit score and saving for a down payment. This is true even if you find the “perfect property”. It will be a better option than getting a home that you can’t fully afford or that you don’t love.
Of course, you might be paying a substantial amount in rent right now and feel frustrated that all of that money is flowing away into the ether. If you can find a quality property that costs less than your current rent, then buying could be the better choice.
Ultimately, it will be up to your needs and your current financial situation. Never rush into any decision whether it’s to rent or to buy.