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Buying VS Renting Homes: Which Is Best for You?

The American dream would not be complete without home ownership. Living in the perfect home gives many people a sense of agency and control in their lives. It provides people with the space they need to grow.

Many people want to move from the cramped spaces of apartments into the spacious interiors of homes. They tire of sharing every wall and long for privacy.

This urge has presented a question for many potential homeowners: Is buying vs renting homes better? Before you start looking, keep reading!

We’ll break down the difference between buying a new home and renting. By the end of this article, making the big decision will be easy.

Buying a New Home

Owning your home means you can control everything about the space. You can do whatever you want with the yard, decorations, and interior decor. You also gain the pride of owning your own home, plus the stability of living in one place for a long time.

Homeownership is also one of the main ways people grow wealth. Buying a home now can result in earning more money down the road.

When people buy a home, many decide to take out a home loan. This process can feel daunting and make you not want to buy a home. But the stability, independence, and chance for growing wealth outway the lengthy process for buying a new home.

Renting a Home

Renting is the perfect option if you cannot afford to own a home. You know exactly how much the rental payments are going to be, and how long you can stay there. If you move around a lot, renting can be easier because you can leave at the end of the lease.

Your landlord is also responsible for any repairs because that’s what your rent is for. But, renting means you can’t do whatever you want with the yard or exterior of the home. When it comes to the interior of the home, growing trends in renter-friendly decorations mean you can still customize the inside of your home.

The main downfall with renting is that if the landlord decides to kick you out, you have to leave. Rent can also increase every time your lease renews.

Other Factors to Consider

When debating buying VS renting a home, there are factors outside of the basic differences we already covered. These differences are important to understand because they can impact your choice.

Taxes

The biggest difference between renting and owning is taxes. Homeowners need to pay property taxes. Many landlords will include property taxes in rental prices, but renters themselves are not directly responsible for property taxes.

Homeowners do get a tax benefit for owning a home. They experience a mortgage interest deduction as long as it’s itemized.

Hidden Costs

Homeowners are responsible for every repair in a home. You will need to pay for pest controls, tree trimmings, homeowners insurance, and natural disaster-related insurances for your area.

Other costs for homeownership include possible homeowners association payments and mortgages. With the combination of these payments, along with insurance and maintenance, you can end up paying more each month than as a renter.

Both homeowners and renters may need to pay for trash, water, and electricity. Renters will also need to pay for renter’s insurance.

The cost for renters is usually laid out in the lease. Many renters will not experience surprise costs like homeowners.

Which is Right For You?

The first aspect to consider is where you are financially. Owning a home can be more expensive than renting. Your mortgage payment combined with all the other payments you need to make can cause more financial strain.

If you can afford to own a home, it’s a valuable investment. Your house can grow in value over time. For many families, this is how they build generational wealth.

When you have a career that makes you move around a lot, renting is a better option. The same goes for if you don’t want to get stuck in one location for a long time. Homeownership is a better option if you want to stay in one place for a long time.

Home Buying VS Renting Homes: Start Your Homeownership Journey Today

Home buying VS renting homes is a question many buyers ask themselves. Knowing where you are financially and what your living goal is can make the decision easier. After reading our guide, your decision should be even easier.

Are you looking for more homeownership advice? Check out the rest of our blog.