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Renting vs Buying

February 27, 2018 | By Ron T. Weems Jr.
  • Buying was always the best option for most Americans. But because of the economic downfall, renting became a better option. When homes values fell, many homeowners fall into an upside-down problem on their mortgages. Many American homeowners now owe more on their mortgages than what their home was worth.
  • A decade has passed since the US economy almost fell on its feet, renting and buying is still a hot debate. In order for people to determine well whether they should buy or rent their home, and don't get stuck in one same answer - below are some of the advantages and disadvantages of either buying or renting your property in today's housing market.
  • Advantages of Renting
    • Lower Upfront Costs 
  • When buying a house, it requires an individual to pay a hefty down payment for the property, including several housing costs like home inspection, closing costs, etc. Unlike buying, renting will only require an individual to pay the first and last month's rental payment plus a security deposit to the landlord. Renters don't have to pay any home inspection, closing costs, maintenance costs, etc. This will let the renter save a few thousand dollars. Renting also improves the freedom and flexibility of an individual to look for other potential locations and properties without committing to one area. An individual can also use renting in testing the potential investment possibilities in the area.
    • Changing Job / Career 
  • There are times that people tend to change their jobs or careers in a short period of time. When you are in this situation, renting is a better option. When you have plans on moving and relocating to another area due to career change, you don't have to worry about any other expenses with the property you currently live at.
    • An opportunity to establish a good credit history 
  • Renting helps you in establishing a good credit score by paying on-time rental payments, which again helps an individual in getting future mortgage.
    • No Maintenance costs 
  • When there are several repairs on the property you rent, you do not have to worry and call the hardware store, rather just call your landlord. In most cases of renting, maintenance costs are shouldered by the landlord themselves.
    • Incidental Expenses 
  • In certain situations that includes accidents or damages that an individual has clearly done in the property, the individual will only shoulder a part of the cost of the repairs needed and mostly still shouldered by the landlord.
    • Partial rights on the property 
  • As a renter, you are also given partial right with the property you rent into. This means that you own somehow whatever is included in the property for the period of time you rent it.
  • Disadvantages of Renting
    • Renting limits you to decorating your own home.
    • You are subjected to follow your landlord rules and decisions
    • You have no control over price fluctuations in rental payments.
    • There is no equity built on the property whenever you pay your rentals.
  • Advantages of Buying
    • Builds Equity 
  • Unlike renting, whenever you pay your mortgage you increase the degree of ownership you have with your property in every payment. Owning your own home also allows the individual to refinance the house and use favorable rates in order to fund major purchases or other costs in the property.
    • Tax deductions 
  • Owning a home can also open the opportunity to decrease your property tax payment or mortgage interest. In most cases, the IRS also excludes individuals in terms of "capital gains" from the profits of the home when it is for sale.
    • Have control over the whole interior and exterior design 
  • Owning the home or property means having the full rights to use it whatever way you want. This allows an individual to have full control of his/her property.
    • Maintenance Choices 
  • Maintenance of your home can be your own decision as well. You could either call a contractor to do the tasks for you or you can be a DIY in the maintenance of your home.
    • Pride of Ownership 

Still the American Dream today is buying a house, and when you own a house you are proud to be a homeowner.

Disadvantages of Buying

Many financial experts say that owning a house is simply an investment. This means that as the dynamic housing market turns into a more dynamic market, real estate markets in the US always vary greatly - which means that every consumer should become sophisticated both in their own finances but also the data that the market produces.