Trying to decide whether you want to rent or own can present a huge conundrum. There are perks and pitfalls to both, but what should really determine your decision is your individual needs. Your lifestyle, financial situation, and goals should dictate what kind of home you want to keep. If you like moving around a lot, for example, owning a home may not be the best option. On the other hand, if you’ve saved money for a down payment and you’re ready to make the purchase, you might as well go ahead. There are also all kinds of other costs associated with both renting and owning a home that aren’t just spelling out in the lease price or the mortgage. Here are four of the major pros and cons you’ll encounter when trying to decide whether it’s better for you to rent or own your home.
Taking Life Stages into Account
One of the major factors in deciding where to settle is what’s going on in your life. If you’re looking to get married and have children, buying a home might be prudent if you want to settle somewhere. On the other hand, you might be in the same situation, but you don’t plan on staying in your current geographical location. It all depends on what your future plans are. The basic difference between a rental property and owning a home is that the rental is more flexible. The only thing you’re tied to for a year or more is a lease. After that, you’re able to freely move and not have any ties to the same residence if you so choose. The other perk of renting is that the landlord is responsible for all repairs and maintenance, so you don’t have to worry about that side of things. The biggest factor, though, is where your current financial situation sits. If you’re in a lot of debt, buying a home may not be in your best interests. You need a back-up plan or at least a cash cushion in case something goes wrong. Once you’re locked into a mortgage, it’s much harder to get out of than a lease.
The Real Costs of Owning a Home
When you own a home, you’re not just going to be paying a mortgage. If you own a house and it sits on land, you’ll also be paying different types of taxes. Don’t forget about replacing the roof, if the basement floods, if your dishwasher breaks, and any other number of scenarios that could happen. While this shouldn’t scare you away from investing in home ownership, you should be prepared to deal with issues like these if they arise. The same goes for an apartment, such as a co-op. You’ll need to pay a monthly maintenance fee, and you’re also responsible for certain costs of upkeep that you wouldn’t be if you were renting.
Understanding the Real Estate Market
The real estate market isn’t only important to understand in order to buy a home at the best price possible, but also to know what you’re getting out of home ownership. There are the possible issues you run into as a home owner, but you also have leverage because you own property. You can borrow against your home, and while that’s not advisable unless absolutely necessary, it does give you an edge above other borrowers. It’s also essential not to buy a home that’s out of your price range. If you can wait to buy, prices will eventually go down again, and that’s the best time to make your move.
Risks to Avoid When Renting
Although you have lots of flexibility while renting and maintenance is the landlord’s responsibility, you also don’t have recourse for certain situations. For example, in certain cities, it’s the landlord’s responsibility to treat a property for vermin such as bed bugs and cockroaches. However, even if they’re financially responsible for it, you’re still going to be living in the situation. You don’t have any recourse if something goes wrong in your apartment and it takes time to get fixed. Housing court is also not an ideal solution, and can take a long time. Always have a back-up plan when you’re renting, and preferably at least a friend or family member’s residence you can stay at if need be.