How Does Purchasing Compare With Renting?
There is truly no comparison between renting and owning a home. The two concepts are worlds apart, such as comparing apples to oranges. If you are a renter considering homeownership, it is time to look at both the advantages and disadvantages of renting a property. Owning a home has many more advantages by far.
Landlord Woes
When you rent a property, you are at the mercy of the landlord for housing quality and repairs. For example, a carpet that is falling apart should be replaced for sanitary and safety reasons. However, some neglectful landlords may refuse to maintain the property, forcing you to live with the issue. Rent increases are also a way of life. Unless you have a lease term, the monthly rent can go up at any time for any amount.
Property Maintenance
Renters with attentive landlords, in contrast, do not have to worry about property repairs that homeowners have to fix and finance on their own. If a faucet leaks, a renter simply calls the landlord. The item is typically fixed within a few days. Homeownership requires you to fix the problem yourself or consider hiring a professional. For some people, being free of property maintenance repairs is reason enough to remain a renter. However, most well-maintained properties do not need extensive repairs on a constant basis, making homeownership well-worth the investment.
Building Your Net Worth
One of the main advantages to purchasing a home is the equity. Each month, you pay down a mortgage balance. You are essentially building equity, or wealth, by slowly making the property your own. Monthly rent typically pays your landlord’s mortgage, effectively building his wealth.
Homeownership allows you to take advantage of tax benefits built around your property responsibilities. For example, any mortgage loan interest and real estate taxes are tax-deductible on your income taxes. None of your rent money can be deducted, essentially giving you no tax benefits each year.
Freedom And Stability
Paying a high rent each month takes away from saving money for a new home or vacation. Homeownership allows you to have some freedom of movement. Once you have enough equity in the home, you could sell it for a profit. Placing most of the profit down on another home, you can also use some of the money for a much-deserved vacation. Homeownership also gives you the stability and assurance that there are no monthly payment increases, unlike renting. You control your financial future when purchasing a home.
