Renting vs Owning a Home: What You Need to Know

Are you unhappy living with a roommate?

You could always look into renting an apartment with fewer people and fewer headaches. Or, you could look into buying a home, so you don’t need to rent one ever again!

Deciding between renting vs owning a home isn’t an easy decision. There are some advantages to both.

Before you decide to buy a house or continue renting, read this article to educate yourself and decide which one is right for you!

Property Values

A home’s value is determined largely by factors like location, size, condition, and market demand. As a general rule, real estate prices in desirable areas and neighborhoods tend to increase over time. Owning a home can be a great long-term investment, which can provide a return when you decide to sell.

Conversely, property values tend to remain stagnant or even decrease over time. For those who choose to rent, understanding property values can help you find the right area or neighborhood.

Tax Benefits

Homeowners are eligible for a variety of tax deductions and credits that can save a substantial amount of money. Some of these include the mortgage interest deduction and the ability to deduct property taxes. Additionally, when a home is sold, the capital gains on the sale are usually exempt up to a certain dollar amount.

Renters, on the other hand, don’t have access to these tax advantages. However, there are still tax benefits available to them, such as the ability to deduct certain costs associated with renting, including tenant insurance, property management fees, and moving costs.

Repairs and Maintenance

Owning a home means you will have to regularly/periodically maintain and repair things yourself. This means that you are solely responsible for doing things such as washing windows, repairing and maintaining the roof, fixing any plumbing/electrical issues, and maintaining the landscaping.

You may be able to find a handyman who can do some of this for you, but it will still cost you. Also, since some of these repairs or replacements can be costly, you need to be mentally and financially prepared to pay for them when necessary.

Time Commitment

Renting a home typically requires you to sign a short-term lease and commit to a set number of months that you will live in the rental space. Owning a home, on the other hand, requires a much longer time commitment and usually does not end until the home has been sold.

Ultimately, the time commitment for renting and owning a home is very different and should be taken into consideration when deciding which option is best for you.

Lifestyle Considerations

Depending on your current life circumstances and what you anticipate them being in the future, one option may be more beneficial than the other. Renting allows you to be more mobile and often more cost-effective than owning a home.

On the other hand, owning a home grants you the security and stability of being a homeowner but comes with the added costs of a monthly mortgage, upkeep, and property taxes. Additionally, you can rent to own homes if you don’t have funds to buy a home or lacks a credit score.

Start Owning a Home Today

When weighing the pros and cons of renting vs owning a home, consider your financial stability, needs, and long-term goals – now and in the future. Educate yourself and analyze your situation to make the right decision. 

And remember, owning a home is a major investment. Don’t take it lightly.

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