Many people question whether it is better to rent or to buy a house. Initially, you may think that renting a house would be cheaper but that is not always the case. Here are some pros and cons for each side: Rent VS Buy.
- Renting is less commitment. It feels easier to pick up and go compared to buying
- When something breaks the landlord will fix it
- The landlord takes care of home maintenance
- If you have been renting for a long time your rent rate may be lower than market value rent
- You do not need a large down payment to move
- A mortgage is often less or similar in cost to monthly rent
- Mortgage payments help you build equity. Paying rent is helping someone else build their own equity.
- Your mortgage payment will remain pretty stable (based on interest rates). Whereas your rent will likely increase over time.
- Updates to your home can help contribute to increasing its value
- The value of your home can increase over the years; it is an investment
- Rent cost follows the demand of the market. The cost of homes increase over time. As this happens, the demand for rental properties increase as well. People start having a harder time affording to buy and then look to rent instead.
You need to ask yourself what kind of lifestyle you want. Do you want to feel like you have the freedom to move about and leave whenever you wish? Do you want to have the equity of your home in the future to draw upon for further investment or to up-size?
Another option is to buy a home for the investment. If you decide you would like to move, or have more freedom, you could rent out your home instead. Also, in today’s real estate market, it is getting more difficult to afford a home.
One salary often is not enough anymore. There are other options to consider. Buying with a friend, sibling, or partner can make home ownership more affordable. With so many options, you can find one that works best for you and fits your lifestyle.