Making the Choice to Rent or Buy A Home
There are many factors to consider when making the decision to buy a house, condo, or townhome. Becoming a homeowner is not only a major investment of both time and money, but it also carries long term obligations when it comes to repairs and upkeep. While buying a home was once considered a key element in terms of fulfilling the American dream, modern house hunters often find their interests and lifestyle, as well as their pocketbook, makes renting a more viable option. In the interests of making an informed and educated decision when it comes to how, where, and when to invest your hard earned money, the following are some of the advantages associated with making either choice.
The Advantages of Buying a Home
Buying a home is still considered a smart investment, despite the history of ups and downs in the housing market. According to a report on the advantages of home ownership by Forbes, there are a number of potential benefits that continue to make home ownership a smart and desirable goal for many people. These benefits include the following:
- Being a homeowner helps you to build wealth over time. Your home is something you can pass on to your children, and with a little luck, foresight, and planning, it is an investment that will increase in value over time.
- You build equity with every payment you make when you own a home. When you are renting, you could be in a lease for years and spend thousands of dollars, yet at the end you have nothing to show for it. Every mortgage payment you make builds your equity in your home, similar to making a deposit in your savings account at the bank.
- Home ownership entitles you to tax deductions. When you buy your home, there is the first time home buyers credit as well as closing cost deductions, as well as property tax deductions and credit for interest paid on your mortgage.
- In the long term, buying is cheaper than renting. While it may be years in the future, there will come a time when you will no longer be required to make payments. Depending on your interest rates, the amount of down payment, and the type of home you buy, even in the short term buying can be cheaper than renting.
The Advantages of Renting
While decreases in interests rates and increases in rental prices is making home ownership more attractive, a Money Crashers report on the pros and cons of buying versus renting claims there are some ways in which renting may be better suited to some people. While you will not be building equity and your housing costs are likely to increase over time, reasons to consider renting include the following:
- You will not be responsible for major maintenance. While your landlord may not be especially prompt when it comes to repairs, they are the one you will call when you water heater or air conditioning unit breaks, rather than having to deal with it yourself.
- You have the flexibility to move. Though you may be required to sign a lease, you still have the option to move when you want, wherever you want, without having to worry about selling your home.
- You can avoid potential losses in the event the market does not do well or the home you buy declines in value. With no financial investment in the property, you have no nothing to lose.
Reach Out to Us for Assistance
When you are considering buying or selling a home, contact our experienced New York real estate attorneys. At Cavallo & Cavallo, we are your neighborhood law firm, here to protect your rights and interests in any investment you make, providing you will legal answers and solutions to make the most of your assets.