Buying vs Renting The economic decline has possible home buyers, especially first time home buyers, scared to invest anything into the housing market. With the fear of another depression in the back of everyone's minds, some businesses are attempting to clarify the pros of home ownership.
“When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from federal income taxes, and usually from your state taxes” (Home Buyers Guide, p4). Buying a home can be alarming, if you are not prepared, whether for the first time or even for the fifth time. If you take time before going into the process to gain the knowledge needed, one might see that …show more content…
But on the other side, if you are renting, unless you damage the property, you don’t have to pay for fixing repairs.
When you own your home, you have the luxury of not answering to a landlord, and the ability of decorating the inside and surrounding property as pleasing to you. But as a renter you have the flexibility to move when desired instead of staying stationary in a purchased home. As you see there are definitely pros and cons when deciding if renting or buying is right for you. When you rent, you don’t have the responsibility of maintaining the home, you aren’t worried about improving the interior or exterior of the dwelling, you don’t have to pay taxes on the home, and you aren’t faced with the possibility of losing the capital put into the housing market, or the possibility of foreclosure if a mortgage payment is missed (Should you rent or own). But on the flip side, when owning a home the equity in the home can be converted into money if refinanced or sold. Over the years, if kept well, real estate property increases in value and therefore this asset will up in value the longer the property is held (Should you rent or own). Timberwoods Townhomes has recently converted from a co-op into a first time home buyers community. “A housing cooperative is a form of home ownership in which people join to form a cooperative corporation which owns the building in which they live” (Cooperative Housing,
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Some people might think that renting and owning are pretty similar, but they do have a lot of differences that people tend not to think about. In fact most people don’t do a lot of research on the differences and similarities. Renting a place to live is a wiser choice and is cheaper in the long run, but having a place that you own has a lot of advantages to. Some differences that people don’t think about are maintenance, utilities, and restrictions.
The obstacles landlords have to overcome causes them to lose their motivation to invest in rental properties and they instead flock towards other housing options to include condominiums, office towers, and hotels.
In places with a rent control board or agency, the tenant usually doesn’t have to take that risk. The tenant can report the violation to the board or agency and ask for permission to withhold rent. In some cities, if the condition of a rental property is very bad, the board or agency can take over, collect the rents, and make repairs.
In the early years of a mortgage, the majority of the monthly mortgage payment goes to paying the interest. Over time an increasing amount goes to reducing the principal. As the principal is reduced, the equity will increase on the owners home. Owners Gain tax advantages by deducting mortgage interest and property taxes from their federal income tax form. They should Stabilize their payments with a fixed interest rate on their home loan. They should Have a secure place for their family to live. A home provides a permanent place where a family can live and grow, and the owners can decorate or expand a house the way they would like to create their dream home. There is always a negative compared to a positive. A home could lose value. There is no guarantee that a home will increase in value. It could decrease in value especially in a rocky housing market. Another benefit renters have over homeowners is that they do not have to pay property taxes. This can be a
Another great benefit of “rent-to-own” is that, this gives potential buyers an opportunity to get a home without having a great credit score. As stated before, many Americans were affected by the economic crisis that hit America years ago. This not only affected the sale of homes, this affected people’s financial stability. Thus, credit scores of many Americans were gravely affected. Many suffered bankruptcies, maxed out credit cards, failed businesses, etc. Fortunately, the “rent-to-own” option has made it possible for people to get a home even if they were affected. As a matter of fact, while you are in the process of renting a home, you can work on rebuilding your credit. This is what makes this benefit so great. However, this only applies to renters that are financially stable enough to go through this process. For example, if your rent, utilities, food, household
When someone makes the decision to buy or rent a home they must consider the advantages and disadvantages of each. In buying a home the primary advantage is that you actually own it. You can do whatever you want with it. Also, you are building equity as the years go by. “People today have problems saving for their future” (CNN Money, 2014). However, when they buy a home, the
Renting is typically less expensive overall than owning a home. First, it does not require a substantial down payment, though it often requires a security deposit equal to 1-3 month's rent. Also, renters are not responsible for property taxes and repairs on the home, as homeowners are. Monthly rent is often cheaper than monthly mortgage payment, depending on the home and the property being rented.
Some individuals may believe that buying a home is part of the American dream and that renting an apartment does not compare, yet satisfied renters would disagree. Even though owning a home provides a sense of security while allowing modifications without permission, renting is preferred more often over buying because the expense of updating, monthly payments combined with utilities, and paying insurance on a home comes with a high price tag. A homeowner does have several luxuries such as forming lasting friendships with their neighbors, making landscaping changes to their yard, painting and designing their home. While that remains true, renting an apartment comes with several different options and
Viewing where you would like to spend your time, away from the city, and work. When buying a home, you may even be taking money away from investments that can be made for the future retirement. There is principals and interest every month on the loan, as paying for the principal your money begins to grow (Waal, P.1998). Usually, the first year is interest, also, buying a home there is homeowner’s insurance, property taxes, and maintenance to keep up. As in leasing a home, consider throwing your money into someone else’s lap. The cost of repairs, maintained or other issues that the landlord is responsible for. Overall, I personally bought and built my home, it was a headache, I tell people that I would not build again. I also have rented apartments or rented a home out at Fort Bragg, NC. Every situation is different, it really depends on how you want to accomplish for your future. With a home, it is yours and you may change things in it, but as renting either get permission, or just some attendants just do what they want with your home, but when the attendants move out they should paint it back to the original color. Either way, you go, it is hard to make that decision in
For instance, if you find that you like the idea of change and don't wish to reside in a home for more than a few years, leasing would appeal to you more so than purchasing a home on a fixed mortgage. Also, with leasing comes the privilege of avoiding costly repairs. If you wish to rid yourself of some of the common upkeep required for homeowners, leasing may prove to be a viable option. Be sure to check with the owner first to see what he/she will or will not recover while you are residing in the
For the past several years, the housing market has been mutually beneficial for both buyer and seller. The cost of real estate has risen but has maintained or gained value. People who have owned their home for quite awhile are seeing astronomical amounts of money to be made off the sale of their home, and so the market has been inundated with housing for sale. It leads us to wonder whether this boom is heading for the crash. Is now still a good time to buy? If so, what type of property will continue to gain value? Will new buyers end up stuck in their home as the value drops? As a homeowner, I am nervous about the state of the real estate market. This is not the house my family wants to call its home forever, but could we get stuck here? Yes, we could. If the housing market drops, then so will the amount of money we could potentially make off the sale of this house. If it drops enough then it would be possible to end up owing money upon the sale. Unless you are independently wealthy, you hope to make money off the sale of the home to help finance the purchase of the next home. Real estate agents will tell you that now is still a good time to buy. While it is speculated that the market will drop within the next year or two, if you are willing to sit on your new purchase for several years, an upswing will occur again. There is never any guarantee that you will recoup the money paid for and put into a home. If you intend to purchase a home soon, it would be a good idea to
Maybe to them it will be simply easier than to pay off what might be required to pay for the house. Or maybe the dreaded mortgage of which we've all heard of will come to wreak havoc on our day. Maybe they do not want to deal with the little things that come with a house. Like a lawn or a yard that must be continuously maintained. Or the everyday simple problems that can arise in the household that otherwise the landlord would fix. But no matter the pros and cons of the ownership of a
Attention Getter: Should I buy a home or just keep renting? This is the most important question prospective home owners consider before buying a house because owning a home isn’t for everyone.
Buying a house provides stability forever unless the owner decides to sell or to move into another home in which the owner gains equity for selling. This is still a huge benefit. Owning a home is a very huge security measure. When a person is an actual homeowner and not a renter he or she can control who actually enters his or her home (Map, 2011). It is easier to purchase home alarm systems and everything that goes on in a person’s home is controlled by the owner. As a homeowner the option of what is allowed and what goes on is controlled by the actual homeowner. If an issue comes up and the owner has to move somewhere else then this is a huge benefit. As a seller a person can earn so much money and it can build equity (Media, 2010). Usually homes sell for way more than the purchase prices, especially if the owner has customized the home, in which was discussed earlier (RP Reality, 2011). The selling price could be a huge benefit to any owner who is selling their home and moving. These benefits cannot be earned by an apartment renter.