Does it make more sense to buy a home or pay rent? This is an age old question that has no perfect answer.
There are times when it’s better to pay a mortgage than rent. But there are also times when it’s preferred to pay rent, such as if you’re staying in a new location for a short period of time.
In this article, we outline five of the top reasons for paying a mortgage vs. paying rent.
1. Equity
With rent, every dollar you pay goes to your landlord. You don’t get anything in return except for a place to live.
But when you own a home, your mortgage payment goes toward building equity. So, over time, you’ll have more equity than what you owe, which turns into an asset.
In the end, it’s your hope to pay off your mortgage entirely, which will save you a lot of money.
2. Tax Benefits
For many people, mortgage interest and property taxes are deductible. Adding to this, if you work from home, you can deduct a portion of your space on your tax return. This all saves you money.
With rent, you don’t get any of these benefits.
3. Customization
Are you interested in turning your house into a home? With a rental, you don’t have the opportunity to customize the property. Instead, you have to follow the rules as laid out by your landlord.
When you own your home, you can put your personal touches on it from day one. This includes everything from painting to landscaping to renovation projects. If you can dream it, you can bring it to life.
4. Power Over Maintenance Decisions
When renting, it’s nice to know that you don’t have to pay for maintenance. However, don’t lose sight of the fact that you’re on your landlord’s schedule. Just because you file a maintenance request doesn’t mean they’ll get to it right away.
When you own your home, you’re in charge of maintenance. You can take action based on your schedule, which includes DIY repairs if you’re handy.
5. Cost Savings
Even when you factor in taxes, insurance, and maintenance, you’re likely to find that buying a home is more affording than renting a comparable property.
And as noted above, you’re building equity when you buy a home, which benefits you financially over the long run.
Final Word
Only you know if it’s better for you to buy or rent. The best thing you can do is compare the pros and cons, with your situation in mind, so that you can make an informed financial decision that will put your mind at ease.
