Did you know that there are more home renters now than at any time since 1965? With an increase in home-owning costs, it’s become a major option for those looking to expand without the overhead fees of homeownership. Then again, there is still a huge desire for many Americans to reap the benefits of owning a home.
So, which is best for you? Let’s explore everything you need to know about renting vs owning a home.
The Pros and Cons of Renting Vs Owning
There is a lot to consider when it comes to choosing to either rent or own a home. Let’s break down the pros and cons of each to give you a better idea of what to expect.
Pros of Renting a House
One of the best benefits of renting a house is that you aren’t responsible for home repairs, property taxes, and maintenance issues. Leave the headache to someone else and focus on your one monthly payment. These homes for rent give you a great idea of what to expect.
You also don’t need to put thousands of dollars in down payments and upfront fees like homeownership. At most, you’ll need an application fee and security deposit.
If you have a nomadic soul and are not sure where you want to settle down, renting is a great choice for you.
Not sure if you like the place? No worries. It’s certainly easier to break a lease than selling your house.
Cons of Renting a House
When you rent, someone else is in charge of what you can and can’t do on a property. You’ll need to ask permission to make changes and be prepared for them to say no.
Depending on your rental contract, you’re also subject to rent increases that help your landlord build equity and pay off their mortgage.
Pros of Buying a House
Owning a house is a great way to invest in your future by building equity and creating stability. Depending on where you live and whether you’re a first-time home-buyer, you can find mortgage rates that are similar to rent payments.
Another bonus is that if you have a fixed-rate mortgage, you won’t need to worry about inflating payments every year. Can you say the same for rental prices?
When you own your home, you can indulge your HGTV fantasy by fixing up your bathroom, adding color, and creating your dream backyard without asking for permission.
Cons of Buying a House
Be prepared for higher upfront fees and costs- including a typical 3-20% down payment, closing costs, property taxes, and your homeowner’s insurance.
Alongside those upfront costs, you will also be responsible for all maintenance repairs needed: new roof, water heater, sump pump, etc. Things can add up quickly, so make a plan for how you’d be able to handle that.
To get approved for homeownership, you’ll also have a lengthy process that consists of inspection fees, credit score checks, establishing a debt-to-income ratio, and a loan-to-value ratio. These help lenders establish what your mortgage and insurance will be.
Finding Your Perfect House in Charlotte
Trying to decide between renting vs owning a home can seem daunting. Hopefully, you have a better idea of what to expect to help your decision. Check out our blog for all other finance, home, and real estate tips you need to know.