Renting Vs. Buying
It’s better to buy a home than to rent one in most cases. But not in every case. Here are a few easy guidelines you can use to help you evaluate which is best: Buying or Renting. See below for a few simple guidelines.
- Rent if you intend to move within a few years
- Rent if rental payments are low in your area
- Rent if you don't expect to live more than another 15 years
Building equity vs. “throwing your money away on rental payments”
It is often said that by owning a home you are not wasting your money on rent and that you will recover the money spent on mortgage payments. This may be true to an extent, but when you buy a home you will still throw money away on things that don't build any equity. For example:
- Closing costs
- Mortgage Interest
- Property taxes
- Home Owners Insurance
- Maintenance
In fact, these expenses are sometimes more than you’d likely spend on rent. If the only financial advantage to buying a home were building equity, it wouldn’t be enough to offset these expenses, and it would be better to rent. See below for some simple advantages of buying over renting:
- Your mortgage payment is locked in and does not increase. Rental rates tend to increase every year.
- The value of your house can increase over time
- You stop making payments when your loan is paid off
- Mortgage interest in tax deductable
There are many rent vs buy calculators on the internet that can help you evaluate which is best for your sisuation. Click this link for more information.Rent vs. Buy