Renting vs Buying – The Age Old Debate DebunkedLets Get Started
AUTHOR: Kim Miller
Is renting or buying better for me? This is the question that many are contemplating these days. In truth, there is no right or wrong answer, only what works best for you. There are many things to consider, so I encourage you to take your time making your decision. There is never a wrong time to make the right decision for yourself!
Renting typically means you’re free of any ownership responsibilities, such as maintenance, upgrades and fixing structural issues. You also don’t need to pay for items like smoke detectors, furnace or air conditioning fixes, plumbing issues etc. Renting allows you to have a better idea of your fixed monthly expenditures because don’t have to worry as much about emergency home repairs or hikes in property tax. There may be other distinct advantages to renting. From pools to tennis courts, walking trails and playgrounds, a condo community can offer a variety of unique amenities for renters. Keep in mind that although renting can be great, it does have its limitations and downfalls too. As a Tenant, you are obliged to abide by the rules set by the owner, landlord, or property manager. These rules can pertain to pets, the amount of time a guest are allowed to stay and decorating. Less space generally means less storage as well, so you may find the need to pay more for a storage unit. Rental rates although somewhat controlled, can and will fluctuate over time. Tenants have no control over this and may need to move if rent spikes above their spending ability.
Owning a house can be a great source of pride. It can also help make you feel more financially stable and secure. Unlike rent which tends to increase every year, your mortgage payment will remain the same for most of the term of your loan, assuming a fixed rate. Owning a house is also an investment that many people can understand better than say, investing in the stock market, because they realize the tangible daily benefit of living in their home. The financial benefits of home ownership can also often be more significant and offer the financial stability that stock investing may not. Real Estate typically increases year after year. Another important factor to also keep in mind is that as a homeowner, you are responsible to fix everything yourself and keep up with mortgage payments, utilities, property taxes, insurance, and repairs but, you are also free to do what you like with the interior like painting, flooring and kitchen cabinets. All things that can help improve the overall value of your home. It seems like a lot to take on, but it is not impossible!
If you are considering stepping up to a higher-cost living situation, educate yourself; speak with a Financial Advisor, Mortgage Broker and Realtor. Know what’s going on in the rental and ownership markets. Make sure you can handle it. Prepare. If you think you are ready to buy, a good early step is to start putting money aside to see how it feels. Let’s say that you’re paying $1600 a month in rent and you estimate that your cost for a house would be $2,000 a month. Put aside the other $400 a month, every month, for at least 6 months. This will allow you to see if you can cover the higher monthly payment and are comfortable with the lifestyle change that will undoubtedly come with it. As an added bonus, doing this will also help you save some money for your down payment should you choose to buy.
At the end of the day, the decision will come down to what works best for you and/or your family. Although renting offers great flexibility and mobility in the event of an unexpected life-changing event, home ownership offers you a chance to put down your own roots somewhere and invest in your future!
This is a Guest post by Cindy Alarie who is a registered Sales Representative with Sutton Group Incentive Realty Inc., Brokerage.
Not intended to solicit Buyers and/or Sellers already under contract with a Real Estate Brokerage.