Owning Vs. Renting a Home

Home prices are rebounding and interest rates remain low.   Is it the time for you to own your own home?  Here are some important considerations.

                     OWNING A HOME

ADVANTAGES

DISADVANTAGES

Equity and Income Tax Deductions – Buying a home is a long-term investment.  Each payment on your mortgage means you acquire more ownership over your property and build equity.  Ownership also means that you can itemize your deductions and write off some or all of your mortgage interest, property and state income taxes.

Maintenance Costs – You need to expect to pay for the upkeep and maintenance of your new home, in addition to some manual labor unless you can afford to outsource these (lawn care, painting, handyman, etc.).

Inflation Protection – A fixed mortgage payment on your home protects you from inflation.

Up-Front Costs - Funds to cover closing costs, down payment, property taxes and home insurance premiums.

It’s Your Home - Home ownership can bring a sense of security and allow you control over the decisions made to your property (keep in mind that you may still need to abide by the rules of a Home Owners Association)

Loss of Mobility – You lose the flexibility to relocate without going through the process and cost of selling or renting your home.

                        RENTING A HOME

ADVANTAGES

DISADVANTAGES

Lower Costs Up-Front – A typical rent agreement will only require first and last months’ rent and a security deposit.

No Equity or Tax Deductions – Renting means that you do not own the property and cannot build equity.  When your lease is up, you have no investment in that property – no matter how long you’ve lived there.

Mobility – Renting provides more flexibility and comfort in terms of knowing that you are not tied down.   If your circumstances change in your income or career, you can change your living situation without the fear of ruining your credit.

Rent Payment Increases – You have no control over the cost of your lease renewal.   Homeowners have the comfort of a monthly fixed mortgage and don’t have to worry about fluctuating interest rates due to inflation.

You Get to Try Before You Buy – Renting can allow you to try home ownership before you make the commitment and take on all the additional responsibilities.

Tenant Rules – Do you have a pet?  Do you want to paint your bedroom or drill holes to hang your new HDTV?   You might run the risk of eviction.

If you are considering whether to buy or rent, there are also some great “buying vs. renting calculators” on the Internet that you might want to consider. Here is one offered on by the New York Times website.

Marie Dinsmore  |  The Dinsmore Real Estate Team

www.DinsmoreTeam.com   |   www.GA400ShortSales.com