Buying vs. Renting is a widely discussed topic.
Do you fork cash over to a landlord in exchange for responsibility freedom for residential maintenance, or take out a mortgage and shell out monthly for the pride – and eventually financial payoff – of homeownership? A need to explore the true values of buying vs. renting can enlighten an individual.
The deeper questions are: Why exactly are you considering buying over renting? And when is the right time for you, taking into consideration your financial goals?
A recent study from Zillow/Trulia, shows that homebuyers nationwide face more challenges this year, with inventory down 6.5% from 2014 and home values up 3.3% over roughly the same period. While the market appears to be in the seller’s favor, many still opt to buy for stability, tax benefits or some other plus.
There are plenty of reasons to buy and likewise plenty to support renting a home. Below are a few considerations.
Buying a home provides a place to live – stability for you and your family. With each mortgage payment you also know you’re closer to outright owning that asset.
• Stability. Knowing you own your home and land is a comfort to many and gives a sense of ownership pride.
• Tax Benefits. As a homeowner, you can deduct many related expenses.
• Diversification. While real estate doesn’t always prove the best investment over a long time – it can serve as a great portfolio tool.
• Equity building and retirement planning. As a homeowner, you build your equity through paying down your mortgage over the years.
Renting. If you’re part of the population that’s unable to buy at this time, you have a few good reasons to rent.
• Flexibility. Maybe you prefer to move around, seeing new neighborhoods and cities; it’s hard to put a dollar value on that experience and enjoyment.
• Avoiding homeownership costs. As a tenant, you enjoy the perks of your home without the worrisome financial burden of maintenance of home and yard.
• Liquidity. Renting allows you flexibility and other investment options.
• Building credit. Creating a history of on-time rental payments can often help build your credit to qualify for a mortgage down the road.
Best Coast Realty, LLC’s advice is to have an honest insight into your wants and needs of your current lifestyle and your financial health.
Talking to a financial advisor, an accountant and even a professional REALTOR can bring light to your situation.
Advice from Best Coast Realty, LLC:
- Set a budget of what you can afford and stick to it.
- Explore areas a little further out from the city center
- Look at up-and-coming neighborhoods to find greater value
- Consider homes that you can fix up over time.
- By saving cash on your home purchase, you’ll ensure that you have the liquidity and flexibility to invest your remaining capital strategically.
Check out this helpful tool to see the real scoop of buying vs. renting. https://www.trulia.com/rent_vs_buy/