Came across this interesting article from Lisa Ross who is the official writer at Tour Wizard that I wanted to share with you.
You want to move, this is the only thing you desire and you know for sure. But now here comes the problematic part, whether to rent or to buy a place? If you have the money in your pocket for both scenarios you have to balance things wisely in order to get the best deal. Take into account both the pros and cons and only then make your final decision. It might appear troublesome, but in fact it isn’t. You just have to take your time and decide what suits you the most. A fact is certain, this is probably one of the biggest financial decisions you will ever make, so you have to be careful.
The prices in what concerns both cases are different for each and every market, and consequently what might appear a good deal in some markets might not be advantageous in others. Therefore, in some situations it is better to get the opinion of an experienced real estate agent who might give you the clue of what to do in that particular period of the year and area.
External factors such as the season, the market and the real estate trends might influence the end result for you. Every situation is different and should be studied as such. However, you need to be aware that moving into a rented house or into your new one can change your life completely. In a good way or a bad way, it only depends on you!
Study the matter in depth before deciding. Here are some things to consider that might help you!
Advantages and disadvantages of renting vs buying
In order to make the best decision, both cases should be attentively analyzed. In the end this will make the difference between a genuine financial nightmare and your dream house.
Even though for some, buying a house might stand up as an essential step in having a successful life, this isn’t always the smartest option. Handling today’s hot market may bring some unexpected surprises too. In other words, this can differ from one town to another, and from one suburb to another, depending on the style, size and the location of the house.
Pros of buying a house
In some markets, the gap between renting and buying a house has diminished drastically, thanks to several powerful factors. Undoubtedly, owning a house has a wide array of benefits. But let’s take them step by step and analyze the most important ones.
In terms of privacy, owning a house doesn’t have any direct competitors. Being a homeowner in most cases guarantees you a high level of privacy. The exception to the rule however is having neighbors too close to your property. Of course, this can also be dealt with when choosing which property to buy. So choose wisely!
-Safe from being forced to move
Being a homeowner guarantees you stability. No one can force you to move under any circumstances. You don’t depend on the other’s plans that is for sure!
-Invest directly into your home and not in renting
Analysts all over the world agree that the amount of money you spend when paying mortgage rates ‘get directly back into your pocket’ and the reason is a simple one – you invest into your own property and you don’t waste money while paying a rent.
-The house can increase in value
Another advantage when buying your own home can be the increase in value. The price you pay today can get you wealthy in the future… Of course, there is also the possibility of losing money when wanting to resell it, but this is closely linked to luck and to market trends.
-You are in control
You can do whatever you want with the house. You can break down walls, redesign everything just the way you like it. These things don’t apply for tenants. Do you need another room? Go ahead, and build one more! You don’t need permission!
-Your housing payment will stay the same
Once you sign a fixed mortgage-rate you can be sure you won’t pay more from one month to another, so no surprises for you here! Interest payments remain the same.
-You can use your house as an investment that will produce money later on
As a homeowner, you can get money out of it in the future if you chose to rent it. So investing in your property will only bring you benefits and more money.
Cons of buying a house
-Not much flexibility to move
When buying a house you must also consider the fact that you cannot move as fast as you would as being a tenant. If your life plans change from one day to another think about the time you need to put your house on the market and actually sell it; this can take up to a couple of months.
-You have to stick to your mortgage plan
Once you get into the game, you have to play it till the end. Too much delay and you can lose everything!
-You need to qualify for a mortgage
In order to be able to get a mortgage plan, you need to have a specific profile – those with a bad payment history won’t get to enjoy these kinds of benefits. Not everyone can get a mortgage, you know?!
-It’s a big financial commitment
Owning a house implies far much more costs than renting one. Once you start paying your mortgage rates you have to stick to the plan, or otherwise you’ll lose everything or even worse, much more. So, can you actually afford to buy it?
-You can lose money when reselling
As mentioned earlier, if you plan on reselling your house in the future, think about the incertitude you face in real estate. Here were talking about moving sands… Today’s plans might not go hand in hand with those of tomorrow and you may lose money instead of gaining more. This is a gamble you have to assume…
-You need to afford maintenance costs as well
Owning a house implies higher investments than renting an apartment, for instance. You need to be ready from multiple points of view, primarily financially. For instance, if your heating system breaks down, you need to be able to pay for it, especially if it’s winter time, no one is going to pay for it, but you. So, get your pocket ready for unexpected costs.
Pros of renting a house
-It might be cheaper
In some markets, renting has proved to be cheaper than paying a monthly mortgage. Unfortunately, this depends on the type of property, location and the financial stability of the housing market at that point. It doesn’t apply to whatever circumstance…
-You don’t pay property taxes
From another point of view, renting doesn’t imply paying property taxes that owners have to support, for instance. But, specialists state that in most cases a part of the taxes are included in the monthly amount tenants have to pay. So, this mostly depends on the angle from which you see the matter.
-You can save money
Contrary to mortgage rates when the amount of money is significantly bigger, rents can allow you to save money. You don’t have the same privileges of owning a house, but there are other benefits instead. Every matter has its pros and cons, you just have to see what counts the most for you. You can invest the money you save as a tenant into something else that appeals more to you.
-You can move at any time
You are not constricted to stay somewhere you don’t like and more than that you can move at any time. Either because, you have a type of work that forces you to move from now and then, or that you simply adore changing the panorama often, renting allows you to enjoy life from a different approach, ‘now from a place, tomorrow from another’.
-No need for maintenance costs
If something doesn’t work you just call the landlord and he’ll get it all fixed for you. You don’t need to worry about extra costs, maintenance is easy for you, as a renter.
-It’s easier to rent a place than to buy a house
Buying a house requires a lot more paperwork and time than renting a place. It’s far easier and much faster too.
Cons of renting a house
-It might turn out to be difficult for some
For some, being a tenant doesn’t seem such a good idea and this because of various factors: either that we talk about the social status, the mental comfort or the freedom you get while owning a house, they all add up to a picture that some definitely avoid.
-Your renting expenses can rise from one month to another
Depending on the plans of your landlord the amount of money you pay on a monthly basis can rise. Of course, that you’ll be notified with some time in advance and you can move to another place, but this doesn’t hold the owner to raise your monthly payment.
-You cannot remodel the house as you wish
For any change you want to bring to the house, you need the owner’s approval. Unfortunately, in most cases paying a rent doesn’t mean much more than having a roof above your head.
-You might need to move when you least expect it
In some cases, the plans of the landlord don’t coincide with those of the tenant. Life can sometimes take you by surprise! Either because the landlord has to sell the place or he needs the place for himself, these all affect you as a tenant.
-You must be in a good relationship with your landlord
The need to always be in contact with the owner of the house also oblige you to be in a good relationship with him. Therefore, even though you are not a sociable person, some cases require you this.
All these pros and cons can give you a slight idea of the changes that any of these actions can bring to your life. Homes cost more money, but have considerable advantages, while renting a place offers you flexibility, but at the same time instability. In the end, it all has to do with seizing the right opportunity that just opens up in front of you!
So are you better off buying or renting? It’s up to you…
Rent or To Buy?
Call or text me at (630) 669-2401 for your real estate needs. Visit My Website: www.MonicaMancano.com Monica Mancano, REALTOR®/MRP, Century 21 Affiliated, 1999 W. Galena Blvd., Aurora, IL 60506.