Buy a House or Rent? The Pros and Cons of Each

Are you interested in buying a home? Or do you think renting makes more sense at this point in your life? Buying a home brings many advantages, but comes with a few drawbacks, too. Let’s take a look at the pros and cons:

Advantages of buying your own home:

  • Gaining ownership of the property. As you put money toward your loan’s principal, you gain equity. That means when you sell it you will get money. And of course, once you pay off your mortgage, you own the home. No more monthly payments!
  • Potential income. As the owner of the home, you can rent it out partially or wholly. Make sure to follow the local rental property laws. You can also take in short-term renters through property-sharing platforms such as Airbnb.
  • Having a community. Homeowners tend to stay longer than renters, so they usually put down roots and get involved in their community. If you buy your own home, you get a sense of belonging as you sponsor block parties and join your neighborhood association.

Disadvantages to buying a home:

  • Maintenance responsibility. As the homeowner, you are responsible for all uninsured repairs.
  • Possible financial loss. Although you gain equity as a homeowner, you don’t always gain profit. Your home can decrease in value or stay stagnant. Therefore, when you sell your home, you may not make money.
  • Unfurnished. As you look at houses, they are often designed very well to help you envision yourself living there, but usually, when you buy a house, it is given to you empty. Although you may also have to buy furniture in an apartment, the (probably) smaller space, means you’ll have to buy less of it!

Advantages of renting:

  • Not responsible for maintenance. As a renter, you have the ease of calling your landlord if a pipe burst or something stops working. He or she will cover those costs.
  • Less strict credit requirements. Landlords run credit checks where you are either approved or denied. If you have a good history without any bankruptcies, you should be fine. The credit standards for mortgage lenders are typically higher.
  • Utilities may be included. As a homeowner, you would have to pay for all of your utilities, but as a renter, sometimes utilities such as cable TV are paid by the owner.

Disadvantages of renting:

  • Throwing your money away. Every dollar you spend on rent will not be seen again, unlike gaining equity when buying a home.
  • No control over housing costs. Your landlord controls your rent, and he or she may increase it annually.
  • Housing uncertainty. Laws require landlords to give eviction notices, but you are not guaranteed that you can stay in your rental property as long as you want. On the contrary, homeowners can be confident they will remain in their house, as long as they pay the mortgage!

Overall, the buying versus renting debate does not have a winner. This decision depends on what you can afford and where you are in life. We hope to see you looking for your future house at Weaver’s Pond. Contact us and let us help you find your home.

 

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Sellers' market