Rental vs Ownership, which one is best

Dated: January 28 2021

Views: 476

When it comes to saving money, a lot of people ask themselves what is the best option, owning or renting a house. Both have advantages and disadvantages, such as minimal responsibilities and freedom while renting, or the possibility of building equity and a source of tax deductions. But on the long run, which one is the best financially?

Owning a house is considered part of the “American Dream” and most Americans either own or plan on investing in a house soon, which explains why the Real Estate market has always been so big in America. Renting, however, may prove to be not as simple as it seems. Here are some pros and cons that should be taken into consideration when deciding where to live.

Renting

More freedom to choose where you live. When your lease is close to expiration, there is always the option to move out of the house without any penalties or charges. This gives you the freedom to choose where to live and how much to spend.

Unexpected raises or sudden changes. However, you are dealing with a landlord who may suddenly decide to raise the rent or turn the property into something else, causing unexpected changes in your life.

Fixed monthly expenses. While renting, you have a better control on what you will spend every month, and unexpected house maintenance such as broken pipes or leaking roof won’t reflect directly on your pockets.

No equity. While paying rent, you’re not building equity. Compare it to homeowners who have to do down payments and pay a mortgage every month, they are always building equity.

Ownership

Your house. Simple as that. You can do whatever you want, whenever you want. Tired of the wall color in your living room, just paint it. Don’t like the floor? Replace it. You have the freedom to do whatever you please.

Susceptibility to losing value. Owning a house can be a viable way to build wealth, but it can also lose value. The neighborhood can decline, local businesses may close. It all affects your house as well. But it can also be worth more in the long run.

Tax Benefits. Homeowners are allowed to deduct mortgage interest and property taxes when they file tax returns each year. Depending on how much you are paying on mortgage, when you calculate it with housing costs, principal and interest, mortgage taxes, you may end up saving as much as if you were renting.

Harder to move out. The feeling of ownership and belonging to a community is essential for many Americans, but it may also bring the feeling of being stuck in a place. Selling a house involves way more time and money than a rental. If you’re more of a nomad person, renting may be the best option, as you have the freedom to choose where you live every year. 

These are just some of many valuable points to be considered when deciding where to live. It is never an easy decision and you will need a qualified Real Estate agent to help you with this decision, that’s why Agent Plus Realty is here for you. With many trained agents with years of experience, we will assist you in choosing the best place for you and your family.

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Sources

https://www.zillow.com/mortgage-learning/buying-vs-renting/?113047347091dsa-94090092640 6459688491276

https://www.investopedia.com/articles/personal-finance/083115/renting-vs-owning-home-pros-a nd-cons.asp

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