Rent vs. Own in Today’s Economy
Is Now the Best Time to Buy?
Homeownership has been long associated with the American Dream, yet the economic climate of recent years has left some potential homeowners on edge. Many potential homeowners have put their dream of buying a home on pause – or even abandoned it altogether.
If you’re thinking of buying a home but aren’t sure if it makes sense for you right now, consider these pros and cons of renting versus buying.
Pros of renting
- Renting is a short-term commitment. You can sign a lease and have the flexibility to move somewhere else after the lease is over.
- Maintenance and repairs are typically handled by the landlord, saving you time and money. Additionally, taxes and other local expenses are also often covered by the landlord.
- If you live in a city with high property taxes, renting may be more affordable, helping to reduce the costs of your monthly payments.
- Move in costs may be less, often including a security deposit and/or first and last month’s rent vs. saving for a down payment and closing costs.
Cons of renting
- Your landlord or management company may increase the rent upon lease renewal.
- Renting may offer less stability. Besides the possibility of higher prices, your landlord could sell the property or change other lease terms during renewal.
- There’s an overall lack of control. For example, repairs are on someone else’s timeline and you can’t make major alterations without permission.
- Paying your monthly rent doesn’t contribute to building equity, which means it can’t be used as a long-term wealth building strategy or as a way to tap into your assets for a cash need.
Pros of buying
- You can build equity by making consistent payments on your mortgage. Your equity may be a potentially valuable appreciating investment and can be used for a cash-out-refinance or HELOC, which lets you borrow against the equity you’ve built up. Homeowners often use this cash for home renovations or to pay off higher-interest debt.
- Fixed mortgage rate options provide more predictability and stability for monthly payments, unlike rent which may be increased with renewal.
- Qualifying homeowners might be eligible for mortgage tax benefits.
- Homeowners are free to alter, decorate and renovate without landlord approval.
Sponsored by JPMorgan- Chase (Taken from The Post)
