When thinking about moving to a new place, one of the first things you need to decide is if buying or renting a home is the right option for you. When it comes to choosing between the two there are many factors to consider. Renting may seem like the best option for someone trying to familiarize themselves with a new area before making a full commitment. If you are struggling to choose between renting and buying here is our compiled list of pros and cons for renting a house.
Typically people are quick to think that when you’re renting a house you are “throwing away money” or “wasting money that could be spent buying” but the reality is that you need to spend money on a place to live and often, it is a personal preference. When you’re renting a home, there are actually a lot of pros that do not come with owning a house.
Renting comes with so much flexibility for a person or family. For instance if you have a job that entails lots of traveling and moving renting may be the best option for you. Not knowing when the next time you are going to have to pack everything up and move to the next city. Renting allows for people to have more flexibility with moving, not having to deal with selling a house every time you need to move.
When people first buy homes there are a lot more costs that go into the sale of a new home. Costs such as appraisal fees, down payments and closing costs are all added onto the sale of a house. When it comes to renting a house, these costs are not applicable. In fact the only other additional cost you may encounter is an application fee. Another hefty cost when owning a house are random repairs and maintenance to ensure upkeep. When you rent, these repairs and maintenance are paid for by the landlord, not out of your pocket.
Another great reason to rent is the ability to save. If you are nervous about making the jump to buying a house, or you need a few more months to save up for your dream house, renting is a great way to be living without all the responsibilities attached to owning a house. Renting allows for you to budget your earnings so that you can start saving for that dream house. Then, one day, when the timing is right, you will be ready to buy.
Renting is the perfect way to test out a new neighborhood in a new location. Choosing the right neighborhood can be difficult, so renting a house allows for you to test the waters before committing. If you like the neighborhood you can end up buying a house, or if not, you have the flexibility to move elsewhere. Once your lease is up you can move out and try another neighborhood that might be better suited to you!
Renting isn’t all sunshine and rainbows with no consequences. There is a reason why so many people choose to buy houses versus renting a house. Here are a few reasons that turn people away from renting.
Costs can rise
Living in your rental is great but if your landlord sees an opportunity for growth in the neighborhood your rent can be raised. As the popularity of the neighborhood you are in increases your landlord can adjust pricing as they see fit. There are some places that have rent control, meaning landlords cannot raise the price of your rent after you have signed but it is not common throughout the country.
Landlord can choose to sell
Another disadvantage to renting is that if your landlord chooses, they may want to sell the house you are renting. If you are wanting to buy the house this may be seen as a benefit but if not, you are forced to find a new place to live. Sometimes landlords choose to come back and live in their home which results in stress for you as you need to quickly find a new place to live.
No tax benefits or equity
One of the reasons people tend to own a home rather than renting is due to the tax benefits that can come along with owning. According to tax laws, those who itemize their taxes are able to write off their mortgage interest payments. Also owning a home gives you equity over the property. According to Quicken Loans, “Equity is the difference between what you owe on your mortgage and what your home is currently worth. If you owe $150,000 on your mortgage loan and your home is worth $200,000, you have $50,000 of equity in your home. Your equity can increase in two ways. As you pay down your mortgage, the amount of equity in your home will rise. Your equity will also increase if the value of your home jumps.”
Making the decision to buy or rent is hard and not something to be taken lightly. Ultimately the decision is based on lifestyle, your chapter in life, and affordability. Be sure to consider all the pros and cons of renting before making a final decision. At the Talons Group, we always aim to help guide you through these processes to ensure you are making the right decision.
At The Talon’s Group we are committed to making sure every homeowner is in the perfect situation for them. Our unique strategies and service are unparalleled for those looking into a new home. If you are looking for a new home don’t hesitate to contact us at 334.758.6220.