The Pro's and Con's of Renting vs. Buying
Life is full of responsibilities that can change the entire course of your life. These responsibilities can include finding the right job for you, choosing a life partner, finding the right place for you and your loved ones to live. But when it comes to finding a place to live with your family, deciding whether you should buy or rent your new home can be a very difficult decision to make. You will find several conflicting opinions on the matter from both friends and family members.
Below are some pros and cons you should consider to enable you make the right decision as regards whether to rent or buy your new home.
Consider the Monthly Cost
If you choose to buy your new home, you will end up spending on a lot more things other than just the mortgage. You will definitely have to pay for things like the repairs, property taxes, home insurance, association dues, upgrades, etc. Supposing you take a $190,000 30-year fixed loan to with a 4.5% interest to buy a home valued at $250, 000. Let us say you have to pay $200 on homeowner association dues, 1.5% value as the property tax, 1% insurance, and another 1% on repairs and maintenance cost, you will end up spending $1, 891 per month.
If you choose to rent the same home valued at $250, 000, your monthly rent can be between $1,250 to $5,000 monthly. This rate be determined by the area you choose to rent a home.
When You Need To Move Home
Buying a home makes moving home difficult, but not impossible. Many people change homes, cities, states, and sometimes countries in the course of their lives. If you will live in an area for only a short period, it is better to go for the renting option. Though buying won't stop you from moving if circumstances demand you do so.
Returns on Investment
If you wish to get returns on your investment in real estate, then renting cannot be the best option for you. There is no return on the money spent on your home rent. But buying your home can turn out to be a good investment when you pay off your mortgage and wish to resell.