Personal finance is called personal because we each have unique circumstances, priorities and aspirations. The decision of whether to buy or rent a home is a very personal one, so before you purchase a home, first consider some advantages of renting. Here are five:
1. Less risk. Too many people rush into a home purchase without considering the risk. They should, and you should. Zero percent of renters face foreclosure.
2. Less hassle. Sewer backed up? Call the landlord. Roof leak? Call the landlord. If you don’t own it, you don’t have to fix it. Homeowners, on the other hand, do. Most renters don’t even have to mow and don’t own a lawnmower.
3. Flexibility. What happens when you get that great job offer which requires a move? If you are a renter, you simply move. However, if you are a homeowner, you could find yourself making mortgage payments on your home and rent payments in your new location.
4. Renting is not throwing your money away. Don’t swallow the old myth that renting is throwing your money away. It is true that you don’t get your money back, but you are nevertheless getting something for your money: a place to live. Besides, buyers don’t get a huge chunk of their money back either. Most of their interest and all of their property taxes and insurance are gone forever.
5. Tax advantages of owning are overstated. Yes, owning has tax advantages. But the tax deduction for interest on your mortgage doesn’t kick in unless all itemized deductions exceed your standard deduction. As already stated, renters don’t pay interest in the first place.
Owning a home can be great. However, the decision of whether to buy or rent needs to be thoroughly investigated. Hopefully, these thoughts can help you make the best decision.