Benefits of Buying vs. Renting a Home

Ultimately, home ownership is the best financial decision for the long term. Call me at 903-875-4164 to further discuss home ownership and if you qualify to buy that home of your dreams. I can help you make your realty dreams a REALITY!

Buying a home is obviously a dream for most people. If you own a home already and haven’t felt like that, ask those who have to pay rent every month. It might feel like you are spending a lot of money to buy a home and to spend on its maintenance every month. Yet it’s the best investment in the long run. If there was no financial benefit involved in buying a home, no one would have dared to buy a home today. However, there are always some benefits associated with buying and renting a home.

Here is a brief list of several benefits associated with buying and renting a home:

Benefits of Buying a Home

1. Homeownership Means Building Wealth Everyday

If you have managed to buy a home smartly, it will rarely lose its value. Rather, it will be the most effective investment for you. It’s financially savvy and is seen as a means of building wealth over time. In addition to building wealth over time, buying a home also means equity growth due to price appreciation. Reduction in mortgage payment is actually associated with your equity growth.

2. Tax Interest Deduction Benefits

Buying a home means you’re eligible for mortgage deductions, closing cost deductions, and property tax deductions. Moreover, homeownership will also help your deductions in your private mortgage insurance premiums. However, you won’t qualify for such deductions if you have gross income more than $109,000 when married or $54,000 when single.

3. Buying Vs. Renting in Long Term

Although paying rent might look convenient to every month; but you will be throwing your money away in the long run. On the other hand, your mortgage payment will increase your equity after the initial first few years and eventually the home will by YOURS.

4. Cost Saving

When you’re living in a rental, you always have to go to the homeowner when any of your home appliances does not work. It happens because the homeowner has provided you with substandard items just to save money in the short run. However, when you live in your own home, you’ll buy more efficient products as you have to use them yourself. You won’t be saving money for the short run rather you’d more interested in investing in goods that can last longer and can save you money in the long run.

5. Fixed Monthly Payments

As a homeowner, you’ll be able to enjoy fixed mortgage monthly payments unlike the renters who often have to face unexpected housing cost increments in their monthly rental fees. It will give a sense of security and peace for the homeowner, and will help keep your budget in check.

6. Improve Your Credit Score with Homeownership

Homeownership will help you improve your credit score if you’re paying your monthly mortgage payments in a timely manner. It will also help you create a credible payment history of yours, and you will be able to get a lower interest rate for your home mortgage payment. Similarly, you will also be able to grab more flexible loan opportunities with relatively lower interest due to your credible payment history.

Benefits of Renting a Home

1. No Home Tax Required

When you’re living on a rent, you don’t need to worry about taxes as only homeowners have to give taxes from the rent they get.

2. No Renovation Expense

Similarly, you also don’t need to spend money on home improvement and renovation at anytime while paying rent. It’s the sole responsibility of your home owner.

3. No Passive Income Growth

There is equity growth or building wealth over time when you’re living in a rental as you’re just paying rent. If you’re paying mortgage, you’re actually slowly purchasing the home; whereas, if you’re just paying rent, it’s just a waste of money as you’ll never be able to use that money in long term.

4. Lower Commuting Expense

There are relatively lower commuting costs when you live in a rental as compared to when you’re living in your own home in a suburb location.

How to Decide whether to Rent or Buy a Home?

Here are a few basic questions whose answers will help you deciding whether you should buy a home or rent it:

Do you want to live in a certain location for long term or short term?
What is your financial standing?
When is your expected move in next time?
What is the home-ownership value for you?