Purchasing a home is one of the biggest financial decisions you will make during your lifetime. Buying a home isn’t for everyone. Before you make the decision to buy or rent a home, weigh the pros and cons on home ownership.

Advantages of Home Ownership:

• Greater privacy.
• Homes typically increase in value, build equity and provide a nest egg for the future.
• Your costs are predictable and more stable than renting because they’re often based on a fixed-rate mortgage. Mortgage payments are often less than rental payments.
• The interest and property tax portion of your mortgage payment is a tax deduction.
• There’s pride in home-ownership, which also closely ties you to your community.

Disadvantages of Home Ownership:

• Home-ownership is a long-term financial commitment.
• You’re responsible for all maintenance on your home. This can include inexpensive repairs like fixing a broken toilet to complex and costly repairs like replacing a furnace.
• Owning a home ties you to your community, making it more difficult to suddenly pick up and leave a location.
• Buying a home requires a down payment, closing costs and moving expenses.
• The value of your house may not increase – especially during the first few years.

Advantages of Renting:

• You have more flexibility when you rent. Most leases are for 12 months. So, if your job requires you to move frequently, renting can be a desirable alternative to owning.
• Your landlord is typically responsible for performing nearly all maintenance and repair work on the property.

Disadvantages of Renting:

• There is no tax break for renting. You won’t be able to claim any deduction for mortgage interest and property taxes when you file your tax returns.
• Your housing costs aren’t fixed like they are with a fixed-rate mortgage. Your rent will most likely grow from year to year.

If you are interested in becoming a homeowner, consider taking an online homebuyer education course to learn how to prepare for home-ownership. This will give you a much better understanding of the home purchase process. At Right Size Realty, our focus is on educating our clients about the market and the home buying process rather than just “selling you a home.” If you are considering buying a home, feel free to contact us.  

InCharge (February 12, 2019). Advantages and Disadvantages of Buying A home. Retrieved from: https://www.incharge.org/housing/homebuyer-education/homeownership-guide/advantages-and-disadvantages-of-owning-a-home/