Saturday, January 11, 2014

Pros and Cons of Buying vs Renting a Home

Pros and Cons Rent vs Buying

When you own a home - you have a sense of stability. You take life more seriously and you put heart into your abode. It's an incredible feeling, being able to make a house a "home." You also have a sense of pride and a sense of security.

Is that a good enough reason to own?

You have heard it all before. You should own - you are throwing away your money. You are making a landlord rich… you know it.

Home ownership also comes with a lot more responsibility and commitment. Not just for upkeep but for how long you need to own to be able to recoup expenses.

Let's discuss why you should own or why not.

Pros of Owning a Home

✓ When you own a home your mortgage interest is tax deductible. As the mortgage repayment is made up of a large portion of interest, you get to claim a large portion off your federal taxes. Your rent is not deductible.

✓ Rentals increase regularly and generally by higher margins than a mortgage rate would. You can also fix a mortgage rate and have no fluctuations in monthly payments. That helps you manage your income accordingly.

✓ When you own a home, you can build equity over a period of time. When you rent, you are building the landlord's equity.

✓ You have the freedom to decorate as you wish to suit your own needs, not be dictated to by a landlord. You can plant a garden!

✓ You do not have to rely on someone else to do proper repairs and maintenance.

✓ Opens your line of credit with the bank and helps you build your credit.

Cons of Owning a Home

✓ Property maintenance is now your burden. Major unexpected expenses might arise.

✓ Less freedom to move when you want to and you have to consider selling costs. The less time you live there, the more that could eat into your equity.

✓  Property taxes & other expenses. Make sure you consider all taxes, insurance and maintenance costs, not just the loan.

At the end of the day, you have to be comfortable with your decision. When the time is right and you are seriously weighing your options, it would be a great time to talk to me. I would love discuss the Pros and Cons as they relate to your unique situation and help you to make the decision that is right for you.