Whether you are just starting to look for your first home, or you’ve been in the housing market game for a while now, it can be difficult to decide if renting or buying is the better choice. Each person has their own financial situation that will impact what makes sense for them. Here are some of the advantages of both options to help you in your decision making.
If you’re looking to settle down in one place for a while, buying a home is a great option. It gives you the secure feeling of an established community, and you can make your house what you want it to be for the long run. This can be hard to do when you are on a lease and not an actual homeowner.
Buying a house can provide significant tax benefits that may be enough to convince you to buy instead of rent. It can give you tax deductions of up to $10,000 in property taxes and interest on up to $750,000 of mortgage debt. These can be huge deductions for homeowners since interest payments are often the biggest part of a mortgage payment.
Another advantage to buying a house is that taking out a fixed rate mortgage keeps the house payment the same for the entire extent of the loan. Rent payments can fluctuate if the landlord decides to raise the price of rent in areas without rent control.
Buyers can change what they want to with their house. They can paint, remodel, or make improvements as they see best, unlike a renter that must abide by rules set by a landlord. Pets are also allowed when you own the house, which renters don’t always have the privilege of.
One perk of renting a home is the lighter weight of responsibility for the renter. If there are repairs needed, the landlord is responsible for those tasks, which can be a huge help for those that aren’t very handy with house repairs. It may also cut down on expenses for some household tools and fixtures that are necessary for those repairs.
It is much easier for renters to move than owners, since leases tend to be short-term, and many landlords also allow sub-leasing or sub-letting. Americans tend to be mobile, and it doesn’t make sense financially to sell a house a few years after buying. In this case, renters have an easier time moving.
Another perk that may draw people to rent is the low cost of insurance. This is because renters only need to insure the contents of the property and not the actual structure itself. Buyers insurance can be anywhere from around $600 to $2,000, whereas renter’s insurance averages at about $180.
Renters may also be able to budget easier considering rent is a fixed amount. The cost may even include utilities at times, which gives the renter an advantage to budgeting because the renting cost is set. Mortgages can also create issues when trying to save money, and renters are free from that complication.