If you’ve ever wondered if it is better to rent or buy a home, you’re not alone. Buying vs. renting a home is a hot topic among many of the people we talk to. For years, buying a home has been heralded as one of the best and most sound investments that you can make. After all, it’s called the American Dream for a reason. But do you know the benefits of buying vs. renting a home?
From enjoying more privacy to financial gains and benefits, there are a number of reasons our clients have chosen to take the financial plunge and purchase a home. Here are 5 must understand benefits to buying vs. renting a home.
#1. Your Home is Truly Yours
If you’ve ever rented a home, you know firsthand the design constraints that come along with renting vs. owning your home. When you rent, you’re limited in the options you have to make improvements to your space, express your personal style, or even to feel like you’ve been able to really make your house into a home.
However, when you buy a home, you have the freedom to really make it yours and put your stamp on it. Paint the rooms in any color you’d like, turn the bathroom into your dream project… your home is your canvas and the sky’s the limit. And — bonus — the improvements you make to your home can help to increase the property value.
#2. Your Home Appreciates Over Time
In most cases, when you buy a home, you’re purchasing an asset that will likely appreciate in value over time. This is not only a smart way to establish a strong financial foundation, but it also allows you to leverage the cash you’ve invested.
For instance, if you purchase a home for $300,000 (we’ll assume a $30,000 down payment), you could see an appreciation of 3 percent or more each year, which would mean a gain of $9,000 or more each year — and that’s on top of the $30,000 you invested in a down payment.
Of course, the appreciation on your home will depend on a number of factors, including local market conditions, how long you stay in the house, any upgrades you make, and more.
#3. Your Home has Tax Benefits
In addition to the appreciation realized by your home, you’ll also experience certain tax benefits as a homeowner. For example, homeowners are allowed to deduct their mortgage interest and property taxes each year. This can add up quickly and lead to a significant tax saving, which often helps to tip the scales when asking yourself “Should I rent or buy a house?”
#4. Your Home’s Mortgage Won’t Fluctuate
When deciding whether to rent or buy, here’s another thing to keep in mind. Unlike rent prices, which your landlord has the ability to increase or change whenever your lease expires, your home’s mortgage payment is a predictable and stable payment for as long as 30 years. Rather than stressing about fluctuation rent payments, or whether or not you’ll have to move as a result, you can create a strong financial budget knowing exactly how much money you’ll need for your house payment each month.
Of course, this assumes that you select a fixed-rate mortgage vs. an adjustable-rate mortgage or ARM.
#5. Your Home Can Offer Privacy
As any renter can tell you, there’s not much worse than a loud neighbor when you’ve got an early day coming up. Unfortunately, some rental properties can be constructed using building materials of lesser quality, which doesn’t offer the most efficient or effective sound barrier.
More often than not, buying vs. renting a home can allow you a greater sense of privacy, thanks to a higher standard of workmanship and materials used. Your new home may even have a spacious yard or land that can further act as a buffer between you and your neighbors.
At Reali, we offer honest and transparent real estate service, with experienced local agents, big savings, and zero pressure. If you’ve been asking yourself “Is it better to rent or buy” or “Should I rent or buy,” you’ve come to the right place. Our expert agents are standing by to help you in your real estate search to find the home that’s right for you.
Need help with a home loan? We’ve got you covered there, too. Thinking it’s the right time to buy a home? Find a real estate agent today.