What are the pros to renting vs buying?
With interest rates being so variable, you may be wondering what are the pros to renting vs buying. Look no further, we’ll dive into a few of the best reasons for either options!
This post is about the pros to renting vs buying.
Let’s dive into the top 5 pros of renting vs buying.
Renting
1. Flexibility
There’s SO much flexibility to renting! Specifically the location and price, which are imperative especially if you need to relocate! This is one of the biggest pros, as this doesn’t hold you back if you’re planning on job hopping.
2. Lower Upfront Costs
The most you would typically have to front is the security deposit and potentially the first and last month’s rent. While that is quite a bit of money, it is nowhere near a down payment for a property. This makes renting the much more affordable option in the short-term.
3. No Maintenance Costs
Other than the flexibility in locations, the next massive pro is that there are no maintenance costs! Maintenance is included in your monthly rent payment, and that is HUGE! That means anytime your appliance breaks or something in your apartment isn’t working properly, you give your landlord a call (or submit a ticket via their online portal if renting from a company), and they’ll have maintenance come in to fix your problem. Awesome, right?!
4. No
Property Taxes
Property taxes are probably often overlooked, but it is a required expense if you’re a homeowner. However, as a renter, you don’t have to worry about paying property taxes!
5. Free Amenities
Love going to the gym or using the pool? That’s great, because these are popular amenities offered by apartment complexes! This could save you both time AND money – if it’s included in your rent, you don’t need an additional gym membership. Plus, it saves you time because your gym is located where you live – no need to commute!
Buying
1. Equity
Your mortgage payments ultimately help you build equity over time. Equity is definitely an asset for you, and something you can count on in the future. Essentially, the money you put into paying off for your property could mean money you can pull out later when you sell it. That’s something you can’t do with renting – the money you put into renting is money that’s spent.
2. Stability
There’s a lot of stability to homeownership! As in no need to move every year, so you don’t need to change your address for your various accounts.
3. Tax Benefits
There’s the additional tax benefit where you have the ability to deduct taxes related to mortgage interest and property taxes.
4. Appreciation
Real estate has a good chance of appreciating in value. This is one of the reasons buying real estate is such a popular choice in investing. When you decide to sell, it can potentially provide a higher return than you initially purchased it for.
5. Ability to Generate Additional Income
Since you own the property, unless you’re bound by an HOA, you have the ability to generate additional income if you chose to. You can do this by renting out an extra bedroom or building a separate ADU (accessory dwelling unit) and renting that out.
To reiterate, the top 5 pros to renting vs buying are:
Renting
- Flexibility
- Lower Upfront Costs
- No Maintenance Costs
- No Property Taxes
- Free Amenities
Buying
- Equity
- Stability
- Tax Benefits
- Appreciation
- Ability to Generate Additional Income
There you have it! Interested in learning more in buying a house? Check this post out for buying house fees you can’t overlook.
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