It’s time for you to leave your parent’s house and go out on your own. Before you start shopping around for places, there’s one thing that you need to ask yourself.
Should you rent or buy a house?
There are plenty of perks that come with both options. On the one hand, buying a house comes with an expensive down payment. On the other hand, you’ll have complete control over your space.
You won’t be able to customize your rental as much, but not having to pay real estate taxes is a big financial bonus.
These are a few pros and cons that you’ll need to consider when making your decision. Check out this guide to learn how to weigh your options.
Benefits of Buying a House
It’s not cheap to put a down payment on a house. If something breaks, it will be your responsibility to fix it, and you’ll have to pay real estate taxes. Yuck!
Despite these drawbacks, there are some benefits of buying a house, such as building equity, improving your credit, and having more design freedom.
When you rent a home, all your hard-earned money will fill your landlord’s pockets. It’s not going toward any kind of investment.
When you’re paying your mortgage, you’re gathering equity. It’s like your own personal piggy bank.
After building it up for a while, you can take money out of it to pay for an emergency or put a down payment on a second home. You’ll have to put the cash back later, but having the financial security offers some peace of mind.
Improve Your Credit
When you take out a home loan, your credit score will take a small dip. Since you’re taking on such a large amount of debt, it can’t be helped.
The more you make regular mortgage payments, the more that debt comes across as responsible debt. As long as you wait about six months before you take on another loan, your credit score will be able to bounce back without a problem. In most cases, it will be better than it was before.
If you’re not happy with the color of the walls in your rental, there’s usually nothing you can do about it. The landlord isn’t going to be happy if you paint the place.
As far as pets go, you won’t be able to have anything exotic. Most rental places will even draw the line at some fish tanks. There are dog breed restrictions, and you’ll only get to have a certain number of pets.
If you don’t want to have to abide by these annoying restrictions, you’ll be better off buying.
Benefits of Renting a House
With all the benefits of buying a house, you might be wondering if it’s even worth it to rent.
The answer may still be yes.
You won’t be able to customize your space too much and you won’t build equity, but it may be worth not having to handle your own maintenance. There are also no real estate taxes, and you’ll have access to some awesome amenities.
No Maintenance Bills
If you buy a home and something breaks, it’ll be up to you to call in a repair service. If you’re not prepared, the resulting bill could break the bank.
If something breaks in your rental home, you won’t have to reach into your piggy bank to handle it. It will be the responsibility of your landlord.
No Real Estate Taxes
Depending on your property, you might have to pay thousands of dollars in real estate taxes when you buy a home. When weighing renting vs. buying, not having to handle that kind of expense is one of the biggest benefits of choosing the latter.
Access to Amenities
You can put a pool on your bought property, but it will put a huge dent in your wallet. Why deal with it when you can find a rental that has a pool included?
You can have access to a gym and many other perks without having them tacked onto your rent.
Things to Consider
Still asking yourself “should you rent or buy a house?” There are a few more things to consider before you make your final decision.
Most people don’t have the money to put a down payment on a house in their bank account. Handling all the buyer’s expenses can be hard on the wallet.
When trying to choose between a private lender vs bank mortgage, you’ll find that private lenders don’t have as many regulations concerning your credit score. Unfortunately, if you have a lot of debt, it’s going to be difficult to get a loan from either.
Maintenance can also cause some financial strain. If your roof decides to crumble, you’ll be out thousands of dollars.
How Long Do You Want to Stay Tied Down to One Place?
Are you trying to find a place to put down roots for a while, or do you want a little more flexibility? If you think that you’re going to stay in the same place for five years or more, you’re pretty safe to buy.
If you’re looking to get a job promotion that may force you to move, renting will make that easier.
Are You Under Pressure?
There is no set timeline for life. Just because your family and friends all have houses, doesn’t mean that you’re failing.
It means that you’re not ready to take such a huge step, and that’s okay. Don’t let societal pressures trick you into buying a house before you can afford it.
Should You Rent or Buy a House? The Answer Is up to You
Should you rent or buy a house? The answer is all up to you. If you have the financial means and you want to have some control over your property, buying might be the way to go.
Those who aren’t looking to put down roots yet may find that renting is the best choice.
For more tips that will help you choose the perfect place to live, visit the Household & Real Estate section of our blog.