by Brandon Beatty
Should I buy a house or continue renting? It’s a question that many are faced with, and the answer is—it depends!
It’s not a one-size-fits-all answer, as many factors need to be considered, including your financial goals, stability, flexibility, and preparedness to purchase a house. Maybe you’re a recent college graduate and don’t know the first thing about buying a home. Or you just got out of a long-term relationship. Renting may be the easy way out “because everyone does it after college” or “everyone does it after a break-up.” But, that doesn’t mean it’s your only option.
I’m going to break down the pros of renting and compare them to the pros of buying.
You’ve probably heard a lot of opinions when it comes to renting. “If you rent, you’re throwing money away.” Or the classic, “Well, all I’m doing is paying someone else’s bills.” While that may be true sometimes, it’s not always the case. There are several perks that come with renting, you just have to see if they outweigh the perks of purchasing.
Flexibility: Renting gives you what I like to call “Flexibility once a year.” Typically, landlords make you sign a 1-year lease. This locks you into that rental agreement for 12 months, but you can move at the end of those 12 months! Most home purchases are a 30-year commitment.
Stable payments: Say you rent payment is $1200/month. You know you will spend $1200 a month on rent with little, to no, added expenses. However, with renting comes the possibility of an annual rent increase from your landlord or property management group.
Call the landlord: Typically, when renting, your landlord will assume responsibility for problems that may arise. Leaking roof? Broken windows? Flooding in the bathroom? The landlord or building manager will take care of these fixes for you. Keep in mind, however, that a landlord may manage multiple properties, so you shouldn’t count on them being at your beck and call.
Now, if a friend gets out of control and kicks your door down, that will most likely be your responsibility, so make sure you have responsible friends!
You’re probably saying, “Brandon, that all sounds great, and I don’t see many negatives to renting. So, why even consider buying?” I’m just getting to that!
Why Purchase a Home?
I like to say that purchasing a home is the sneakiest and largest savings account you’ll ever have! And now, that money is at historically low borrowing costs, why wouldn’t you buy?!
Equity: Owning a home comes with a certain level of pride. “Oh, I own a home.” It’s sounds so adult, right?! It’s yours. Nobody can take it from you.* Every monthly payment you make goes towards paying off YOUR house. Why does this matter? EQUITY. This is the biggest and best advantage of buying vs. renting. With every mortgage payment you make, the money goes back to you if/when you sell. If you rent, all those monthly payments and hours spent eating, sleeping, and watching the big game on Sundays are wasted when you decide to move.
Make it your own: Do you want a big red door on your house? Guess what? You can do that. Will your neighbor hate it? Maybe. But your home is yours, and you can do that if you want. Many landlords can tell you what you can and can’t do with renting. I am speaking from personal experience. My old landlord didn’t like the color of my curtains, so I had to take them down. Guess what, now that I own a home, I can have whatever color curtains I want!
Think about your future: Do you want to have stability in a location where you can raise a family? Do you love the schools in a particular area? Do you have a favorite restaurant in a certain part of town? Will the house appreciate over time? If you answered yes to any of these questions, get in touch with me so we can review your options.
I recently purchased my first home, so I know first-hand that it is one of the greatest feelings ever and one of the best decisions I’ve ever made. Is it a huge responsibility? Yes. Do I miss paying for parking or having a landlord breathing down my neck on any move I make? Absolutely not.
I hope this has helped you to see that the pros of buying a home far outweigh the pros of renting. Reach out to myself and the Kelly Mortgage Team and let us help you find the perfect savings account that happens to have a roof and a front door. Cheers!
*Make sure to pay your mortgage bill on time to ensure this is the case!