Rent or Buy? How to Make the Right Decision

When it comes to choosing a place to live, you have two options: rent or buy. Which is the better choice? The answer depends upon a variety of lifestyle and situational factors. Here are a few of the pros and cons of renting and buying that will help you decide which option is right for you.

Why You Should Rent

• Less money upfront: When renting a home or apartment, you’ll usually have to pay first and last month’s rent and maybe a security deposit. When buying, however, you will need to fund a substantial down payment as well as a variety of added fees, such as closing and inspection costs. If money is tight at the moment, renting may be the best option for you.

• More control over your money: The money you save on upfront costs as a renter can be invested somewhere else for future gain.

• Time to think: Renting allows you to test out different areas before committing to a location long term. This is especially helpful if you’re between jobs or in a short-term employment situation. Renting provides the freedom to pick up and relocate more easily.

• Minimal maintenance hassles: As a renter, you have the luxury of calling the landlord when a plumbing or HVAC issue occurs. Homeowners must deal with the cost and headaches of dealing with all maintenance issues that arrive.

Why You Should Buy: 

• Long-term investment: As a homeowner, the mortgage payments you make each month increase your degree of equity in the home, which you can borrow against in the future to fund home improvement projects or a college education. As a renter, the money you pay each month goes to the landlord and does nothing toward building your own future wealth.

• Tax deductions: The major advantage of homeownership are the deductions you can take at tax time on both your mortgage interest and property taxes.

• Complete control: As an owner, you have complete creative control (within zoning laws and/or homeowner association rules) over your home. So go ahead and paint the dining room purple or build a loft in the family room.

• Achieving the American Dream: Owning a home remains one of the ultimate goals of most every American. Taking part in the pride of homeownership is one of life’s great moments.

Source: Zillow for Yahoo Real Estate

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