Is it better to buy a home or rent? The “right” answer for you depends entirely on your individual circumstances. That being said, here are 7 reasons to buy vs. 7 reasons to rent that will help you think through the situation.
7 Reasons You Should Buy
- The home’s “equity” (the difference between the value of the house and what you owe on it) often increases providing you with an appreciating asset and a down payment for your next home purchase.
- The monthly payments can often be about the same for owning or renting.
- There is a greater sense of stability, security, and community in owning your own home.
- Homeowners can change the décor and landscaping to suit their own tastes.
- Homeowners can do their own maintenance or hire it done without having to wait for someone else to “fix it when they have a chance.”
- Mortgage interest and property taxes are usually tax deductible.
- Mortgage payments do not tend to increase like rental payments often do. Mortgage payments will increase due to the terms of a balloon mortgage, a refinance, or an increase in the escrow account.
7 Reasons You Should Rent
- The initial rental deposit is much less than a down payment for a home and is usually refunded when you leave to apply on your next apartment.
- It is much less difficult to move and much less costly.
- The cost of furnishing an apartment is much less than a house.
- There is little or no cost for maintenance, repairs, or upkeep.
- There is no chance of foreclosure in which you can lose all of your investment.
- Rental insurance and monthly utility costs are normally much cheaper.
- There are no closing costs or realtor fees in renting an apartment.