TruStone Financial knows that when making the decision to buy or rent, there are many things to consider. Whether you have been renting your entire life or just moved into your first apartment, take the following advantages into consideration before renting or owning your next home.
Advantages to owning
Homeowners are able to manage their living situation as opposed to renters who have the possibility of being evicted or having rent increased. This gives owners peace of mind and a stable, long-term home environment. Owners also have the opportunity to carry out home improvement projects without the restrictions and approval of a landlord. Not only is there freedom to do unique home projects, but these upgrades may increase the overall property value and benefit the owner should they choose to sell in the future.
When you choose to buy a home, your mortgage payment goes toward principal and interest. When you choose to rent, your payment goes toward the property owner in exchange for using their property as a temporary home. That’s why ownership, or home equity, is an asset. The monthly payments go toward purchasing the home and therefore become an asset that can be used for future life expenses such as remodeling your home or paying off high-interest credit card debt. According to the Federal Reserve, over the next year the net worth of a typical homeowner will be ahead of a typical renter by a multiple of 45 on a lifetime financial achievement scale.
Advantages to renting
Renting provides more flexibility for a variety of factors including location, budget and responsibility. With shorter lease terms, renters are able to test out a variety of different living situations without being tied down to one location. This goes for financing as well; renting allows occupants to jump from more or less expensive living options depending on their ideal budget.
When it comes to actually purchasing a home, there may be additional costs and responsibilities to add onto the price tag. From closing costs to unexpected home repairs, time and expenses can add up quickly. When renting, there are fewer upfront costs and numerous property management professionals to take care of maintenance issues.
When choosing whether to buy or rent, there are advantages and considerations for both. Take some time to consider your current financial situation as well as your lifestyle to decide which option would be the best fit for you.
If you are looking to make the leap into home ownership, make an appointment to discuss your options at your neighborhood credit union today!
Editor’s note: Segments of this article were taken from mashable.com and forbes.com.