Pros & Cons of Renting vs Buying
Should I rent or should I buy? That’s a question that I get from many of my clients. There are pros and cons to both.
Pros of renting:
The landlord is responsible for up-keeping the property. Of course, if there’s an incident where you flushed a washcloth down the drain, you’ll be responsible. But if the 10 year old water heater in the basement stops working, the landlord is responsible for replacing it. What many people don’t realize is that most landlords take a portion of your monthly rent and save it for projects that need to be repaired on the property. So although you don’t see it, a portion of your rent goes to up-keeping the property.
Cons of renting:
When renting, your monthly payments go directly to the landlord and are not deducted from an overall balance or debt that will get paid down. Your monthly rent is what it is and it will likely increase over time instead of decrease.
Pros of Buying:
Buying your own property gives you a sense of accomplishment. I’ve seen it over and over again. Buying a home and getting the keys at the closing table gives people a sense of accomplishment. Not that renting doesn’t but owning a place of your own causes an emotion to arise that’s a little different.
By paying your mortgage each month, you are paying down the overall balance of the loan and overtime, your payment will get smaller and you will reduce your overall debt.
Buying gives you creative control to make changes to the property without asking anyone for permission. You can paint the walls any color you like, you can add granite counter tops to the kitchen, you can re-organize the shelving in the primary bedroom closet, etc. There are instances where you don’t have total creative control like if you live in a historic district or if you have an H.O.A. where you live. But majority of the time, you can make the creative changes that you like to your home. (FYI, if you’d like to make certain structural changes, add bathrooms, add more square footage to the property, you’ll have to apply for permits from your local township or borough.)
Cons of Buying:
When you buy a home, you’ll likely be spending the most money you’ve ever spent on one transaction. On top of that, buying a home includes fees such as: closing costs, broker fees and loan closing costs. These are fees that you won’t get back.
When trying to consider whether to rent or buy, you have to be honest with yourself. Ask yourself what is best for you at this time in your life and go with that. Ultimately, you have to choose what’s right for you!
