Deciding to rent or buy is a personal choice, and there is no universal answer for every situation. Most life choices will have their pros and cons, and this is certainly the case with home ownership. The best option is to get into a situation that makes you happy and is a healthy and wise decision for your lifestyle and long-term goals.
An Argument for Renting
Renting can be a good choice for many situations. Some rental options can be cheaper than a mortgage payment, and you typically have fewer expenses overall. There are no maintenance fees or taxes to consider, and you don’t need to save up for a possible large down payment. It’s easier to pick up and move if you need to, which provides flexibility and a sense of freedom. If you want to downsize or move across town, no problem. Depending on the lease agreement and property type, you likely won’t need to worry about taking care of yardwork or snow removal, as your landlord or rental agency should cover most of those considerations. Overall, homeownership requires a bit more responsibility than renting. Another appealing option for renters is the access to great amenities like a gym, swimming pool, or playground. Many apartment complexes or condominium communities have these luxuries for you to enjoy as part of your agreement.
An Argument for Buying
On the flipside, buying can be a good choice for many situations as well. Investing in a home means your payments will build equity, providing you with a valuable asset at the end of your mortgage. You can also usually deduct mortgage interest, a line of credit loan, mortgage points, mortgage insurance, and there are some state and local tax deductions. Home ownership provides you with stability and consistency—you don’t have to worry about getting booted out at the end of a lease. Renting can come with a lot of rules and regulations to follow while at the property, whereas buying provides you with the freedom to do what you want with your property (of course, within city guidelines). You don’t need to worry about a “no pets” policy or major restrictions with remodeling interests. With homeownership, you can remodel to your heart’s content. Your loan terms won’t change either, unless you refinance to new terms, unlike rental agreements getting reassessed typically every year, which often increases the monthly rent each year. Another benefit of homeownership is if you decide to move one day: you will likely be able to sell the home for more than you owe and put the profit toward another home in the future.
The rent vs buy debate will continue and it’s because there are valid reasons for both options. If you’re debating with yourself what the best choice is for you, make a list of the pros and cons for your particular situation and provide each consideration a rating scale to help you decide what’s most important. InterWest Mortgage’s lenders are honest with our clients and can provide you with valuable advice on both options.