Asking yourself, “Should I buy or rent?” can cause a stressful and near conclusion. When it comes to deciding whether or not to buy a home, you’ll need to consider how long you plan to stay in the home, your taxes, closing costs, and the fluctuation of the house value.
Here are some quick facts that may help your decision.
5 Quick Facts To Help You Decide If Buying Or Renting Is The Right Choice
- Buying a home comes with extra expenses such as a down payment, a mortgage, brokers’ fees, appraisal fees, title insurance and mortgage origination fees.
- Current tax laws allow you to deduct the interest you pay on your mortgage as well as the real estate taxes you pay on your home from your taxable income
- Renting a house comes with a safety deposit and renters’ insurance. If you’re planning to stay for less than 3 years, renting may be a better choice.
- Your tax benefits may decrease each year after you ask for deductions.
- The lower your credit score, the more interest you may have to pay on your mortgage. When you report deductions for your mortgage interest you’ll have to file a line of credit or credit card loan secured by the property itself.
We’ve compiled a pros and cons list to compare and contrast aspects of renting a house vs. buying a new one.
Pros And Cons
Renting
| Pros |
Cons |
|---|---|
| The amount of extra expenses does not come close to those that come with owning a house | Monthly rent, a safety deposit, and renter’s insurance necessary |
| Short-term investment | If you’re planning on staying for more than 3 years, you may be wasting money on rent overtime |
| Less stress to live in - the landlord takes care of maintenance depending on rent contract | Unstable and rent costs may rise over time |
Buying
| Pros |
Cons |
|---|---|
| Tax benefits are applicable and mostly assumed by homeowners | Tax deductions may be decreased which will cost the house more money |
| Long-term investment - payments will build equity | Extra expenses may cost more than intended over time |
| Starting off paying off a mortgage instead of rent will save you money in the long-term | House prices rise in value most of the time |
The cost between renting and buying can fluctuate based on your individual needs for a new place to live. You can try out this interactive New York Times article to personally balance and conclude what will be the best decision for you.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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