Renting vs. Buying a Home: Which is Better for You?

The Renting vs Buying debate is always a trending topic in the real estate community. Some think it is in your best interest to buy, while others think it is always best to rent. What do I think on this debate? Well I am going to list the pros and the cons of both, and I want you to decide for yourself, and I’ll give my personal opinion on the debate.

RENTING

• Pros:
  • More flexibility to move if your needs change
  • Lower upfront costs
  • No need to worry about repairs or maintenance

• Cons:
  • You’re not building equity in an asset
  • Your rent can go up over time
  • You have less control over your living space

BUYING

• Pros:
  • You build equity in an asset that can appreciate in value over time
  • You can make changes to your home to suit your needs
  • You have more control over your living space
• Cons:
  • More upfront costs
  • You’re responsible for repairs and maintenance
  • You may be locked into a long-term mortgage

So now you’re probably thinking to yourself if it is better to rent vs buy? If you are still struggling, let me add a little spice to help you in this debate. Renting and buying are both good options. Renting could be the best option for someone who moves around a lot. There is a lot less stress when it comes to renting than there is when you buy a home. There is no one-size-fits all when it comes to renting or buying. Let me detail a few more points that could help you decide if you should rent or buy. They are as follows:

• Finances: You need to make sure what makes the most sense financially. Do you have enough saved up for a down payment? Will you be bringing in enough money to pay all your expenses (literally everything, track every penny) and still have money left over? If something breaks, can you fix it immediately? These are big important questions you need to consider if you are going to buy. If s0mething breaks when you are a tenant, no need to worry, you have a landlord that can replace that for you.
• Goals: Next, you need to understand your goals. Do you plan on holding long-term when you buy a home? Could you turn a home into an investment and rent it out? Do you see yourself as a future landlord? If not, then perhaps rental property investing is not for you, and that’s okay! Renting might be the better option. Or, buying and holding one property might fill your needs. Just know if you buy a home, also plan on holding it for at least a few years before you plan on selling it. You will capitalize on the appreciation of your home and will hopefully make enough to cover all closing costs and fees associated. Make sure you net a profit before you sell!
• Control: Finally, you need to decide who you want to have control your housing. Do you want to be in control? Do you want a landlord to be in control? Do you want to have your own rules, or follow the rules from a landlord? For me, I decided that I wanted to take control of my own housing. I was tired of landlords taking their time when it came to repairs. I disliked having to share walls with other people. I haven’t regretted my home purchase yet.

RENTING VS. BUYING A HOME: WHICH IS BETTER FOR YOU?

Think about your current situation. If you are renting right now, and don’t really enjoy it, consider finding opportunities to work your way into buying a home. I was in your shoes, and I knew I had to get out.

So if you’ve made it to this point, you are probably waiting on my opinion on the whole renting vs. buying debate? I would say I am split down the middle on the debate. I see value in both sides. Renting is good for low-income earners, or people on hard times even. There is nothing wrong with renting. If you are looking to buy a home, and are struggling to get by, I highly suggest looking for a new job, getting roommates to move-in and split costs, and cut back your spending. These are things that I did, and helped me save money. When I moved down to Louisiana, I came here by myself. I had roommates, we split costs. Even when my dad lost his job, I told him to move-in with me. I had a roommate again! At one point, I was saving about 60% of my income, which is a pretty high savings rate! This excelled me to save a nice chunk of change!

I strongly believe that wealth-building comes from buying real estate. Being a Realtor, I also have a pretty strong bias toward real estate. Anyone can duplicate the steps that I took from being a tenant, to becoming a homeowner.

One final thought, I’ll leave you with a Chinese Proverb:

“Dig your well before you’re thirsty”