When to Rent and When to Buy a Home

Date posted: 07/27/2012

by Melissa Crumish on
in Moving & Traveling

2631 When to Rent and When to Buy a Home

Relocation – life’s big routine-jolt. There are many things to consider, topped by housing. Not only must you decide on where to live, but also on whether to rent or buy.

The Pros and Cons of Renting

Even with mortgage rates at record lows, many people in the process of moving are choosing renting over owning.

The advantages of renting include:

  • Less work. The landlord handles all maintenance. If you have a leaky roof, it’s the landlord’s responsibility to fix it.
  • Renting is no longer limited to condos or apartments. With so many houses on the market today, many homeowners are choosing to rent. Plus, many foreclosed homes are being bought up and converted into rental properties, providing people who are relocating with many plush rental opportunities.
  •  With so many homes now on the rental market, many landlords are offering incentives, including free parking, lower security deposits, free cable and Internet services, and free or reduced utilities.
  • Some rental homes allow you to live in neighborhood’s that you could not otherwise afford as a homeowner.
  • Renting gives you more moving flexibility to relocate.
  • Monthly rental fees are usually lower than monthly mortgage payments.

Yet, there also are negatives:

  • Inattentive landlords who become difficult to reach when maintenance issues arise.
  • No benefits of appreciating value. You’ll never get your money back when renting.
  • Not all rental units accept pets.
  • You face more living restrictions. Many landlords don’t allow cosmetic changes, or ban grilling on balconies or decks.
  • Irresponsible behavior could cost you lose to your security deposit.

The Pros and Cons of Owning a House

Like renting, relocating into a home of your own presents many benefits:

  • As a homeowner you can deduct mortgage interest and real estate taxes from your federal and state income taxes.
  • Your home may appreciate in value, leading to a financial windfall.
  • Owning a house builds equity, providing retirement security.
  • You can remodel your home when you see fit.
  • Owning a home helps build credit.
  • You have more flexibility for having pets, building gardens, or adding a shed or swimming pool.

But, there also some negative aspects that may make you think twice about capping your move with a new home. These include:

  • The risk of having to sell during a down time in the housing market.
  • Your home, depending on the neighborhood, may depreciate in value.
  • If you lose your job, you’re stuck with the house; the mortgage payments remain the same. Consequently, if you can’t keep up you may lose the home and all the equity you built up to foreclosure. Whereas a renter can compensate for the loss of work by moving into a place with cheaper rent.
  • You’re responsible for all repairs and maintenance.

How about you? Do you rent or own? What do you like best, and least, about it?

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