Buying a home is one of the biggest decisions you will ever make in your life. Most home buyers are met with the dilemma of whether to buy or rent a home. You do not want to look back and regret buying or renting a home 5 years down the line. Hence, you need to consider a lot before making a decision. Most importantly, look at your current financial situation to help you make the right choice.
Here are a few Pros and Cons of buying or renting a home
Pros of renting a home
- Affordable
Renting a home generally costs less money. The initial investment to rent is much cheaper than buying a home. You can use the extra funds you would have used as a down payment for mortgage payment to invest into another saving account that gives higher returns. As for insurance, a renter only needs to insure the content of the rental property and not the structure itself, thereby lowering the insurance costs.
- Limited responsibility
When renting a home, you are not responsible for repairs. The property owner is responsible for these expenses. You also get to enjoy a lesser tax impact on your financial situation.
- Makes budgeting easier
Rent is a fixed amount. Most times, it also includes utilities. Therefore, it becomes easier for the renter to set a budget.
Cons of renting a home
Despite the many advantages of renting, it has its share of downsides.
- The Local law does not cover leasing and tenancy agreements. Hence, a tenant should understand what the lease can and cannot do before signing.
- The tenant should find a way to protect their security deposit.
- The renter should know about the renter’s insurance policy that protects them from damage and losses.
Advantages of buying
- Capital Gain – On buying a home, you assume full ownership and control of the property.
- Tax advantages – The buyer may benefit from property taxes and interests that are itemized for tax deductions.
- Freedom and fewer restrictions – The buyer has the freedom to restructure, redecorate, and make other improvements where they deem fit. Also, the buyer enjoys fewer rules that they must abide by.
- Credit rating – A homebuyer who makes on-time mortgage payments can achieve better credit ratings.
Cons of buying a home
- Extra expenses- Other than the mortgage payments, the buyer should also cater to insurance, taxes, maintenance, and repairs.
- Less flexibility to move – Buying a home will limit your flexibility to choose a new job in a new town.
- Less liquidity on your investment – It can take time to sell a property, thus turning your investment into cash is not as flexible as other investments.
- Fluctuation of property value – The property value majorly depends on when you bought it. If you purchased it during a boom or bust period, the value of the home might not appreciate as you anticipated leaving you with zero profit when you plan to sell it.
Ultimately, buying or renting a home is a personal choice. However, it is majorly dependent on where you are at financially. You do not want to risk living hand to mouth after buying a home when you can rent one, live comfortably and save up a little more.
At Nice Guys Movers Orlando, FL; we treat your possessions with the same care as if they were our own, we offer unparalleled reliability and razor sharp punctuality for both domestic and commercial removal services. Get your free quote now! Call us at: 407-326-73111
