Buying vs. renting a home is a big decision, and there are pros and cons to each option. For some people, renting comes down to what they can afford at the moment. For Walker and other aspiring homebuyers, working with a savvy real estate agent and lender can help them realize they’re ready to take the plunge.
The answer to the buy vs. rent a home debate isn’t so cut and dried. Here are five questions to ask when considering buying vs. renting:-
- What can you afford?
- How long do you plan to stay in the home?
- Do you want stability or flexibility?
- Can you afford to be responsible for home repairs/maintenance?
- What are your financial, career and family goals?
There are different costs associated with buying and renting. Using helps you break down some of these expenses.
Renting vs. buying a home: A comparison
Buying
Advantages
- May build equity and credit.
- No landlord to answer.
- More stability (especially with schools).
- Possible tax benefits.
- Can improve or upgrade home to your taste.
Disadvantages
- Requires substantial money, paperwork up front.
- Could lose money if home values decline.
- Extra expenses beyond mortgage payments.
- Rising home prices and low inventory in many markets.
- Responsible for repairs, remodelling expense.
Renting
Advantages
- Fewer upfront costs and paperwork.
- Freedom to be more mobile.
- Not responsible for maintenance, repairs, property tax bills.
- No need to worry about falling home values.
- Build credit (if your landlord reports rent payments to the credit).
Disadvantages
- Landlord can raise rent or sell the property.
- Choices may be limited depending on vacancies.
- Might have to move multiple times.
- Don’t build equity.
- No tax benefits.
