Buy or Rent? 10 Things to Consider About Homeownership
Find out if buying or renting a home is right for you
The guy above you in the second-floor apartment stomps around like a 600-pound gorilla.
One of the biggest negatives about renting an apartment is the proximity to your neighbors, but renting has advantages, too. According to Bank of America, both owning or renting have pros and cons from financial and personal perspectives, and only you can decide whether owning a home fits your life.
Ready to move but aren't sure where to go? These 20 questions will help you figure out the best place to live for you.
Here are 10 things to consider about homeownership:
According to most real estate professionals, you should probably look into purchasing a home if you have been renting for five consecutive years.
Don't let realtors tell you different – houses are not great investments. That reality set in after the housing bust of 2008. Also remember that real estate is local – the price and appreciation of homes in Los Angeles is much different than in Detroit.
When considering home ownership, don’t overlook expenses like upfront costs, downpayment, closing costs, mortgage interest, insurance, property taxes, maintenance and association fees. Renters don't pay any of those costs.
Deal With It
Leaky shower? Renters simply call the landlord to fix a broken toilet, a failed heating/cooling system or a leaky roof. If you own your home, you'll call the plumber, HVAC technician and roofer – and pay all the bills. Those fix-it costs for homeowners can make you feel like you're being nibbled to death by a duck.
Feel Right at Home
Make sure when you're buying a home, you plan to stay in that area for awhile. Renting makes it easier to relocate – owning does not.
Are you artistic? You can customize your home to your individual needs as opposed to rental units, where your options are more limited.
Here's a specialty of the house: Owning a home will reduce your federal and state tax obligations because of the deductibility of interest payments on your mortgage.
If your rent is less than a mortgage payment, renting could allow you to contribute more toward specific savings goals, such as college, investments, future travel, retirement or even putting away money for a downpayment on a future home. What’s more important to you – the opportunity to build equity over time or have more cash available now?
$1,000 vs. $1,000
For most people, housing is their biggest expense ... but so it renting. If you're paying $1,000 a month in rent, why not instead pay $1,000 a month and purchase a home?
Safe at Home
Bottom line: Owning a home could make sense if you want to put your monthly living costs toward something you could eventually own outright.
If that's your choice, owning a home can make you as happy as birds eating from your fresh-cut lawn. By the way, you'll need to cut that lawn about 35 times a year.