Renting or Buying Your First Home: Which Is Better for You?
When you’re thinking about your first home, you probably feel excited and a little overwhelmed. You’ve already sat down and looked at rental properties in the area and thought about renting versus buying, but making the decision can still be hard. The good news is that for many people, buying makes more sense than renting (and is cheaper in the long run). It’s important to consider both sides and determine what’s best for you and your family.
Benefits of Renting a Home
Some people may feel like they’ll be better off renting their first home instead of buying one. If you’re going to stay in an area for a short period of time or expect your living situation or circumstances to change rather quickly, you may be better off renting at first.
There are some benefits to renting, other than the shorter time commitment. You are only responsible for paying your rent, your renter’s insurance, and your utilities. If something major breaks or needs replacing in the home, your landlord would be the responsible party.
Renting allows you to make changes to your situation in life changes drastically and you can no longer afford the rent – you’ll have to wait out a lease to do it without any repercussions of course. But with buying a home, you’re committed for years.
Why Buying a Home Makes More Sense Than Renting
On the other hand, buying a home makes more sense than renting for many people. For starters, you can usually get more house for your money when you purchase than when you rent. The obvious benefit to buying a home is that it's something that will be yours once it’s paid off. You’ll build equity that you can use later in your life and you don’t feel like you’re “throwing your money away” every month.
You’ll have more freedom to enjoy your home and make changes to fit your personality and lifestyle. Want to paint the room or knock down a wall? No problem, you can do that when you buy a home. You won’t be worried about every little nail hole or the kids getting to rambunctious and scratching the floors like you are in a rental.
Yes, you’ll have to deal with more expenses such as property taxes, homeowner’s insurance, maintenance, and repairs, but again, you’re paying into something you own and get to make your own decisions based on your preferences. You’ll also benefit from tax deductions for owning your home – things like mortgage interest and property taxes can be deducted – not counting any special tax breaks for homeowners.
When you’re considering whether to buy versus rent, you should also factor in that rent can change once your lease is up yearly. You could sign on the dotted line for a modest $800 a month rent payment only to have the landlord raise it to $950 the next year when your lease is up for renewal. As long as you get a
fixed-rate mortgage, you won’t face an increase ever.
There isn’t a one-size fits all approach to the argument renting versus buying because everyone’s situation is different. There are some benefits to each method and it’s something you’ll need to personally weight out yourself. If you need help talking this decision through and would like to see some properties to help you decide, give us a call at (931) 261-9001 today.