Advantages of Buying vs Renting a Home
Right now, the housing market is hot, but is it the right time to buy or should you consider renting?
Even though there are many advantages to buying a home, there are also many advantages to renting a home. Each person’s lifestyle and financial situation differ, so while purchasing a home may be an excellent option for one family, renting a home might be the best option for another. To help with your decision process, check out these advantages to homeownership vs. Renting.
Advantages of Buying
You can customize your home. One of the main perks of buying a home is that you can do anything you want to it. Want to apply peel and stick wallpaper? Do it. Want to rip up the carpet and install hardwood laminate? Do it. When you rent a home, you are extremely limited on the types of changes you can make. Fortunately, some landlords will allow you to at least paint the walls so that you can make it feel more like your own. Typically, more significant changes are not allowed.
You can build equity. The biggest financial perk for buying a home is that you’ll get equity out of it. Your mortgage payment every month is directly applied to your loan on the home. If you stay in your house long enough and have paid down a decent amount of the principal and interest, you’ll receive a check when you sell your home. You can use that equity as a financial tool to accomplish your goals. You get nothing back when you leave your rental, even if you rented for a long time and were a wonderful tenant.
A house may increase in value. The other great thing about purchasing a home is that your home may increase in value, especially if you consider upgrading it. There is no guarantee to this as the housing market fluctuates, but the trend has almost always been upward over time. This means there’s a good chance that you’ll be able to sell your house for more than you purchased it for—depending on the market, of course.
Advantages of Renting
Your landlord handles repairs and upkeep. One of the most significant advantages of renting vs. buying is that you aren’t responsible for repairs or maintenance. Whether your dishwasher breaks, faucet starts leaking or heater stops heating, your landlord is responsible for repairing and replacing these things. When you own your home, you’re on the hook for the purchase, repair and installation of everything.
You can move easily. Another perk to renting is that it’s much easier to move locations. Most places have a yearly lease, and when that year is up, you can decide to renew your lease or relocate altogether. It’s a great option for people who are new to a city because it can take a while to learn which area you like best. Renting is also better for someone with a more flexible work from home situation. Renting makes it easy to live in Lancaster one year and live in Harrisburg the next. If you do consider moving, ask yourself these questions before making the decision.
A house may lose value. Remember that “usually up but sometimes down” housing market? That’s the other advantage to renting. If the housing market crashes and homes drastically lose value, that’s not something you’ll have to worry about. Renting a home is a sure way to safeguard yourself from being financially trapped in a home that’s underwater. Even if the home you rent loses value, your landlord cannot raise your rent to compensate. You’ll keep paying the rent you agreed to in your lease.
You don’t have to pay property taxes or purchase homeowners insurance. One big advantage of renting is that you can skip the expenses that come with being a homeowner. This will allow you to save a little bit of money to put toward home supplies, necessities or even home savings.
Members 1st Can Help You Get Pre-Approved for a Mortgage
If you’ve been considering buying a home, we offer mortgages with great rates, personalized service and an online application. Maybe you’re not sure if a mortgage is right for you currently. That’s okay! Contact us to get connected with your personal concierge. They will be able to walk you through the ins and outs of homeownership to see if it is a good fit for you.