Pros and Cons of renting/Buying a house?
I am contemplating buying a house. I am 24 and would be able to afford one or the other. What are some pros/cons of buying and renting.
- spalmerLv 71 decade agoFavorite Answer
Pros of Renting:
You can move after the lease is up
You are not required to pay for repairs
You are not responsible for property taxes
If you suddenly can't pay, the most you're responsible for is the rest of the lease
Cons of Renting:
You cannot make changes (such as paint - unless approved, building on, etc)
Pros of Home Ownership:
It's yours and you can do what you want with it
Tax deduction (not much though, so don't let this be the deciding factor)
Mortgage doesn't increase constantly (will only increase if taxes and/or insurance does)
Cons of Home Ownership:
You are responsible for all repairs
You are responsible for all yard work
You may lose equity or you may gain it... depends on the market (so you want to plan on staying at least 5 years)
If you can't pay your mortgage... you lose it all
These were just some of the items on my list when I was thinking about buying vs. renting (I thought about the decision for 3 years). I bought my first home last year and I love it (I'm 27). I had been renting since I was 18, but I wasn't ready for the responsibility of owning any sooner. Good luck to you. I suggest purchasing some First Time HomeBuyer books. They list pros and cons of each and really help you to understand each step of the process. The two I loved were: "The Everything Homebuying Book: All the Ins and Outs of Making the Biggest Purchase of Your Life (Everything: Business and Personal Finance)" by Mark B. Weiss and Ruth Rejnis and "Home Buying For Dummies", 3rd edition by Eric Tyson and Ray Brown.
- 1 decade ago
I personally think buying is the best option. They're more affordable than ever before, there's a lot of them on the market and more people are willing to take reasonable prices for them. It is definitely a buyers market. Even if it wasn't such a good market for buying a home, you build equity making payments on a home that either you will someday own, or be able to re-sell for more money after the economy recovers. Until this last year when the housing market go so bad, you never lost money on a real estate investment. Several years down the road when you need to make a change or move: Renting you've gave you money to someone else and they still own the house. Buying you still own the house and will almost always get back the money you paid towards the mortgage. Pros-Cons: If you own the house you have to carry insurance and do maintenance. If you rent, you still pay renter's insurance, but the owner usually does maintenance. You're still better off to own in my opinion. The last house I bought I paid half what it would cost per month for Mortgage than I would have for rent in the same area. I sold it for twice the amount I bought it for. All I did was paint the interior.Source(s): Rented for 6 months then Purchased and sold one house. Never got the rent back, but profited greatly from mortgage payment on my own house.
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- 1 decade ago
From an investment point of view, if you can buy a place for the same monthly cost as renting, owning is a much better choice in the long run.
For example, assume you can buy for $100k or rent for $800/mo. Also, assume a 6% fixed-rate mortgage, property taxes of 1.7%/year and $1,000/year in maintenance. Initially, your monthly expenses will be about the same renting or buying.
However, here's how it will look after 15 years with 3 or 5 percent inflation:
Owning - $1,000/month + $85k equity
Renting - $1,250/month + $0 equity
Owning - $1,050/month + $135k equity
Renting - $1,650/month + $0 equity
- 1 decade ago
Buying pros: You have an investment of your own, you aren't just handing money to somebody else for their investment. There's greater residential security, you don't have to worry about landlords deciding to sell up and you having to find a new home. You don't have to worry about security deposits and whether your landlord is going to honor their obligation to give yours back. You can do as you please with your home - paint it, extend it, refurbish it and you aren't at the whim of a landlord 'getting around to it' when something needs doing.
Renting pros: You have more freedom to move around - you aren't tied to a mortgage and you don't need to make the commitment to stay in one place for at least 5 years. If the area takes a turn for the worse you can be out at the end of your lease. You don't have to worry about the housing market collapsing and how this will affect your home/savings/credit. You don't have to worry about rising interest rates suddenly sending your monthly payments beyond what you can afford. You don't have to find the money for expensive repairs - if the roof leaks, it's not your pocket that's going to have to find the thousands of dollars needed to fix it. You don't need such significant amounts of money saved up, or such rigorous credit checking.
- 4 years ago
Well when you buy a house you dont have to follow rules, like no dogs. If you rent it may be cheaper or more expensive for monthly payment. Make sure you are buying in the right time, when the prices are right.
- Anonymous1 decade ago
Do NOT buy a house unless:
a. You plan to live in it for at least five years.
b. Your income is secure.
c. You have the required down payment cash.
- 4 years ago
Never gave this much thought