As of the second quarter of 2021, there were more homeowners than renters at 65.4 percent vs. 34.6 percent, according to the U.S. Census Bureau, but there are pros and cons of both. If you're thinking about making a move, asking yourself the question, "Should I rent or buy a house?" you've got plenty of things to consider in order to make the best decision possible.
In some cases, renting can be better than purchasing a home, but in others, buying may be the best option. It all depends on the individual, which means it's important to consider your particular situation and understand the benefits that come with buying vs. renting.
Benefits of Buying a Home
Tax advantages. When you buy a home, you'll be able to deduct most or even all of the interest payments made on your mortgage, loan points, and property taxes. With the majority of those monthly payments going towards interest during the early years of the mortgage, that can add up to significant savings when you need it most.
Greater security. Owning your home vs. renting means that you'll be in control. You won't have to worry about a landlord selling out to a venture capitalist who raises the rent exorbitantly or decides to turn it into an Airbnb. If you've secured a fixed-rate mortgage, your monthly payments will always be the same. For many, the security that comes with being a homeowner is one of the most significant benefits.
Increasing your net worth. The longer you own your home, the more likely it is to provide you with a big profit if and when you decide to sell. That can significantly increase your total net worth.
You can truly make it yours. When you rent, you're unlikely to be able to make changes to the home without having to get permission from your landlord. However, as a homeowner, you can make improvements, paint it whatever color you like (with some exceptions as there can be HOA restrictions), and get a dog without having to wait for approval that might never come.
Benefits of Renting a Home
It's easier to move. If you rent a home and life throws you one of those unexpected surprises, like meeting the love of your life who happens to live across the country or you're offered a job in another state, it's easier to move quickly. You might be able to find someone to take over the lease, and beyond that, there's no long-term commitment. As a homeowner, it could be months before you get the right offer, so you could end up stuck with two monthly mortgage payments or finding a renter, at least until it sells.
Lower move-in costs. When buying a home, you'll need to come up with a lot of cash for the down payment, closing costs, and more. On the other hand, renting usually requires just the first month's rent and a deposit.
No maintenance and repair worries. When you're renting, you'll probably want to keep the house clean and maybe mow the lawn so that you have a nice yard to enjoy, but you won't have to worry much about maintenance or making repairs, it's your landlord who will. However, for a homeowner, when the water heater breaks down, the roof needs replacing, or any major repairs need to be done, they'll have to pay for those expensive problems to get fixed.
Published by Rahul Pandey