Should you Buy or Rent a Home
Buy or rent? The short answer is that there is no short answer because it depends on what is important to you. A better question may be “what are your goals”? There are a great many things to consider when deciding whether to buy or rent. Buying a home is a long-term commitment. Renting offers more flexibility and is generally for a shorter term.
Expectations Change
A few generations ago, society dictated that you should follow a set path which included K-12 schooling and possibly further education, getting a good job, marrying well, having children, and providing a home for them to grow and repeat the cycle. As society has changed, so have the expectations. As a result, the options are much wider and can be adjusted to fit your own vision of how your life should go. Childless adults may travel more and want a home that needs less maintenance. Families with children may prefer less travel and a more stable and secure home base. In other words, you can chart the course you wish your life to follow and plan accordingly.
When Renting Makes More Sense
Some prefer to live a more nomadic lifestyle and experience what many different locations have to offer. In this case, it makes more sense to rent. If your funds are limited, renting may be less expensive than buying. Especially if you share a lease with someone else paying a share of the costs. Repairs are usually included and the costs to move in are less expensive than closing costs when buying. You rarely have to deal with the dictates of an HOA (Home Owners Association). It is easier to relocate when you are ready to move on. And you can try many different situations (apartment, condo, house) to see what you prefer.
The drawbacks are that you don’t earn equity when renting, you cannot customize the home to fit your desires, and renting does not improve your credit score. Additionally, landlords may upgrade only when absolutely necessary so the property could feel dated. The rent could be raised when you go to renew your lease. The owner could also decide to sell the property rather than deal with the hassles of renting. If you are financially challenged, renting may be the only option you have available, for now.
When Buying Makes More Sense
In some areas, the cost of renting is as high or sometimes higher than buying. In this case, especially if you have long-term plans in the area, buying would be the better option and will provide you with equity when and if you decide to move on. Equity works much like a savings account but invested in your property instead of the bank. In addition, the interest you pay on your mortgage is usually tax-deductible.
Consistently making payments on time builds your credit. You can make changes and improvements to the building and property to fit your style and the value may go up over time. Buying is often a good investment of both your time and money. Once paid off, your housing costs will decrease to taxes and maintenance.
The disadvantages to buying are that the initial investment and down payment can be quite sizeable. It can be challenging to qualify for a loan. You will be responsible for all repairs and upgrades on your own. You will add property taxes, homeowners’ insurance, mortgage insurance, and possibly HOA fees to your budget. It is also more difficult to relocate as this usually involves selling your home first. This could involve a net loss or significant gain depending on the market and how quickly you need to sell. Prices usually go up over time, but not always. Home buying is considered a long-term investment.
Buying or renting depends on many factors but most importantly, it depends on your goals and your ability to bring them to fruition. Purchasing can be a very good investment but it can tie you down. Renting can give you more flexibility but it won’t give you financial security. Both have their places and most people start out by renting and then move on to buying when they are more financially secure. Note that no one ever feels financially secure enough (unless they are a billionaire, maybe). If you are thinking you want to rent in Durango while you make your life plans, check out The Property Manager. They can help you find the perfect place to contemplate your next moves.
https://thelendersnetwork.com/rent-vs-buy-house-which-is-cheaper/
https://www.thetruthaboutmortgage.com/renting-vs-buying-55-pros-and-cons/
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