Whether you’re planning on renting an apartment or buying a home, a hasty decision should not be made. First, you must take both your lifestyle goals and financial goals into serious consideration.
These two factors will help guide you toward making the best real estate decision for you and your future.
But before we jump into the many pros and cons of renting versus buying, let’s clearly differentiate the two.
In essence, renting requires you to pay a monthly fee to a landlord for use of his or her living space. (Utilities covered in the monthly fee vary from place to place.)
On the other hand, buying property to own requires you to pay monthly mortgage and insurance fees. (Among other expenses.)
Certainly, there’s a lot to dissect before choosing either option. So without further ado, it’s time for some Real Talk!
The Pros of Renting
- Renting offers flexibility. If you’re someone whose job requires you to constantly relocate, you have less responsibility leaving a rental. You can move without any penalties, so long as your lease has ended. However, leaving isn’t as easy when you own a home.
- Renting provides predictable monthly expenses. Although landlords usually require first, last, and a security deposit, this is still less than what you’d pay for a down payment on a home.
- Repairs usually cost less when renting. When it comes to repairs, your landlord will likely be responsible for fixing things like the roof, washing machine, or the air conditioning.
The Cons of Renting
- Personalization is usually limited. Most rental contracts restrict renters and their freedom to customize their living space. This means no painting over a room, changing the tiles, or buying a bigger toilet! Unlike owning a home, you almost always get exactly what you paid for.
- Shared utilities. Utilities such as a pool or washing unit are usually shared by the entire apartment complex. This can lead to more inconveniences and constant repairs, which your landlord can place on delay, especially if these repairs are recurrent.
- Your rent may increase in the future. A landlord suddenly deciding to increase rent is more common than you think. Your landlord could be turning your apartments into condos or selling the property to an entirely new owner. Either reason can result in an increased monthly fee.
The Pros of Buying
- You usually receive better terms with more money down. Dissimilar to renting, buying a home requires you to pay a mortgage. And this tends to bring about intangible benefits like a sense of stability, pride of ownership, and belonging to a community.
- You usually get to customize your living space. There’s less red tape with upgrading and personalizing your home as opposed to a place you’re renting. You can make each room feel more comfortable for you. Also, some renovations may boost your home’s overall market value.
- When owning a home, you may build equity. Equity is the market value of your home minus what you owe on it. In the grand scheme of things, building equity can increase your personal wealth.
The Cons of Buying
- Repairs are yours alone to handle. Unlike with renting, there is no middle man there to take on repair problems as they arise. Indeed, the upkeep and maintenance of your home is an ongoing responsibility, no matter how major or minor the inconvenience.
- The overall cost of homeownership is higher than that of renting. Even if there’s a chance your monthly mortgage is less than someone’s monthly rent, there are still more fees associated. Homeowner’s insurance, water and sewer service, light, and natural disaster insurance, just to name a few.
- The value of your home wavers indefinitely. The rise and fall in value of one’s home is always subjected to the real estate market. And the market changes considerably overtime due to social, political, health, and economic factors. So, if you’re looking to sell your home, it’s always recommended to consult a professional real estate agent.
The Final Say
As we’ve learned today, both renting and buying carry their fair share of pros and cons. In choosing either option, you are encouraged to ask yourself what your budget is and if your finances are going to be stretched too thin.
Also, think about your savings. How would either choice impact your savings? Another thing to ponder is your lifestyle goals. Are you starting a family or focusing mainly on your career?
Ultimately, this important decision is yours to make. And with the knowledge presented here today, we hope you’re now one-step closer to making the right choice for both you and your pocket.
This concludes today’s Real Talk session. If you enjoyed it, feel free to share and connect with us on social media using the links down below.
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Thank you all for reading and we’ll see you soon for more Real Talk!