Renting vs Buying – Which Is Better?

Homeownership has long been a sign of success, but comparing renting to buying isn't all that clear-cut. Renting is less capital intensive, and it gives you the freedom to move when you please. Buying a home will help you build equity and wealth. There are many financial implications and lifestyle factors you should consider when you're making the choice of whether to rent or buy. Learn more so you can make the best decision for yourself.

OWNING

Buying a house is a serious step in your life and you need to consider all the problems you may face and review the advantages you get with your own property. There are plenty of reasons to buy or not to buy a house, but let's highlight the key points that should help you understand whether you’re ready to buy your own property. Home equity is the difference in the market value of your home and how much you owe.

Owning a house is, first of all, a huge investment. Even if you’re not pulling your equity loan, there is always a chance to sell your house later for a better price. The imputed rental income that you receive as a homeowner is not taxed. On top of that, you can deduct your mortgage interest and property tax payments from your federal taxable income.

Owning a house gives you real improvement freedom. There is no landlord who says what you can and cannot do while decorating and improving your house. Renovate your property or completely redesign your bath, you can do whatever you want with your own place. This is something worth paying for. Unfortunately, despite the freedom mentioned above, when you take a mortgage for a house, you’re stuck with this particular place for a long time.

As a homeowner, you have a lot of tax benefits, but you are also obligated to pay property taxes which is usually collected by the municipal government. The value of your property tax is determined by multiplying the property tax rate by the market value of the particular property. Market changes a lot and it means that municipalities may recalculate the property tax.

The house is fully yours and it means that all the repairs and the whole maintenance process are on you.
It’s always fun to call a landlord and ask him to fix a sink, but now you’re on your own and, of course, you pay for all the materials, and work process and spend money on keeping your house well-suited for living in it. Make sure you know all the ins and outs before buying a house in a particular area.

Additional:  What to know about Relocating Out Of State

RENTING

We all love living in the best possible apartment in a great local community, but most of the time these fancy locations have an insanely high pricing tag on the ‘for sale’ houses.In this case, looking for an apartment to rent is the best option for you to become a part of that community or live by the seaside just like you dreamed of as a kid. 

Once something is broken, you don’t have to rush and try to fix it on your own. You can pick a priority of the issue and send a maintenance request to your landlord that something is wrong in your place, the sink is broken or the lightbulb should be replaced. Since the place you rent is not fully yours, there is a need to follow the landlord’s rules and guidelines mentioned in the initial lease agreement. Any change and renovation at your place should be authorized. Some landlords offer their tenants to renovate some particular part of the house and, in exchange, the renovation price will be deducted from the monthly rental payment.

Studies show that more and more Americans prefer to rent a place. You may now think that it’s just because these millennials are so carefree and they don’t want to get involved in loans, mortgage pay off, and the like but not so fast. This may give us a perfect understanding that the desire to own a place has never left the minds of young and new generations. The majority of Americans plan to get a house, once they get a chance, prepare a down payment or start a family.

Buying vs Renting a house is a difficult decision for many and is really determined by your finances and readiness to invest.

More: How to Kill a Perfectly Good Real Estate Deal

Ready to start looking? Maybe need a connection in the loan department? Give me a call at any time! I specialize in Santa Cruz real estate and surrounding areas. 

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