Choosing between renting a property or purchasing your own home is a big decision that requires a close look at the pros and cons of both options. Each route is a major decision that affects your lifestyle and current financial situations. There are several differences between the two that you should consider when deciding which is best for you:
Renting Pros:
- You are free to move around whenever your lease is up. Typical leases are about a year, but oftentimes landlords can do month-to-month depending on your circumstance.
- Repairs needed on the home typically fall on the homeowner, rather than the renter. Of course, some rental stipulations include covering a portion of the bill (for instance, if the water heater breaks) but overall do not require the renter to foot the entire bill.
- Relocating is easier to do when you are renting. There is more flexibility and freedom to move and choices when you are not tied down to a mortgage if you need to relocate.
Renting Cons:
- It’s typical for price to increase year to year while you rent. Because your landlord can increase the rent at any time,
- The landlord could sell the property at any given moment. Even though most reputable landlords will give ample notice before selling their property, it’s always a possibility that you could be left with trying to find a new place to live in.
- Since the rental property is not your asset, rather the homeowner’s asset, you cannot build equity within the property. Similarly, your monthly rental payments allows the homeowner to continue building their equity.
- Oftentimes, there is a “no pets” rule for rental properties. While you can always try talking to the landlord about exceptions, sometimes this rule is strictly enforced.
Owning Pros:
- Pride of ownership in your property goes a long way with a feeling of settlement and stability. There is also freedom in homeownership – renovating the property as you wish and no longer worrying about any “no pets” rules.
- Buying a house can be a sensible investment – you always have the option to lease out the property or even lease individual rooms.
- With being the homeowner, you have more privacy in your property and full control over decision making.
- You can benefit from tax breaks by deducting your mortgage interest payments.
Owning Cons:
- Since you are the owner, you are fully responsible for any repairs, damages, and upkeep and maintenance for the property.
- Property taxes can (and typically do) increase each year.
- While owning a property is an asset, it’s not a liquid asset so selling your property and accessing your funds may take longer than expected.
It’s important to choose the route that best suites your needs and to look at the pros and cons of each. If you decide that it is feel free to contact Eastex Credit Union for all your lending needs. Our team of mortgage professionals are ready to help you with any questions you may have!
