Should you RENT or BUY?
If you are currently renting, the decision to buy a home is a significant one. There are financial advantages and considerations, social benefits, and other issues to consider. As always, contact us if you have any questions or need any clarifications. But, here you will find a couple comparisons as well as a link to a great “Rent vs Buy” calculator!
Differences: Rent vs. Buy Rent vs. Buy Calculator
Rent vs. Buy
Here are major differences between BUYING and RENTING.
GOOD: Advantages
WHEN YOU BUY:
- Increased Equity: Your property builds personal net worth as it appreciates in value over time
- Stable Monthly Payments: Fixed-rate mortgage payments including taxes and insurance do not go up with inflation
- Freedom of Choice: Free to change decor and landscaping as you desire
- Enhanced Community: Connection:Sense of community, stability, and security
- Tax Savings: Mortgage and property tax payments provide significant tax savings
- Timely and Quality Repairs: You are not dependent on landlord to maintain property
- No Restrictions on Pets: No landlord restrictions about pets mean you may have the pets you want
- Choice of Gardens: You will benefit from planting perennial garden, herb gardens, and shade or fruit trees
- Quality Amenities: Improvements such as gourmet kitchens or decks can increase personal enjoyment
- No Rent Increases or Evictions: No concern that rents will increase
WHEN YOU RENT:
- Reduced Maintenance Costs: Little or no responsibility for maintenance
- Mobility: Easier to move
- Utilities Included: Often rent includes some or all utility expense (water, trash, sewer, etc)
BAD: Considerations
WHEN YOU BUY:
- Maintenance Costs: You will be responsible for maintenance and landscaping
- Property Taxes and Utilities: You will be responsible for property taxes and all utilities
- Less Mobility: It can be more difficult to up and move
- Foreclosure Risk: There is the possibility of foreclosure if personal economics take a downturn
WHEN YOU RENT:
- Reduced Net Worth: Paying rent does not increase your personal net worth or equity
- No Tax Advantages: Rent payments are not tax-deductible
- No Choice of Improvements: Landlord can limit your choice of painting, landscaping, gardens, etc.
- Rent Will Go Up Over Time: Renters have no control over monthly rent increases
- Possibility of Eviction: You can be evicted for violations of the lease including failure to pay rent or other non-financial agreements
- No Pets or Increased Costs: Landlord may implement a restrictive pet policy that includes additional deposits, increased rent or even total pet restriction
- Could be Forced to Move: Landlord could decide not to extend lease after term for any reason such as selling the house, or wanting you to leave
