Buying a House: Renting vs. Buying
Pros and Cons of Buying vs. Renting
If you are considering buying a house, one of the first decisions you need to make is whether buying a house instead of renting one is the right direction for you. Since owning a home is the "American Dream", many people simply assume that it's always to their advantage to buy a home. For most of us, it is, but take a moment to review the following lists to see how your situation fits.
Renting
- More fixed costs for the term of the lease
- Not gaining equity, but not losing it either
- When the lease is up, you can just move
- There is generally less work in maintaining a home or apartment
- Smaller amount of "up-front" cash
- No matter what happens with the value of the home, you will never gain equity
- Limited - or no - ability to personalize your living quarters
- No tax advantage to renting. Your landlord gets any and all tax breaks that are available
Buying
- Variable costs
- Equity may go up, down, or stay stagnant
- If you want to move, home generally must be sold
- Work needs to be done by you - or paid for by you
- Generally a larger initial investment - the downpayment
- Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase
- The ability to remodel and redecorate the home to match your needs and desires
- There can be tax advantages attached to home ownership. Consult competant legal or accounting advice for details for your situation
reprinted courtesy of Our Family Place