Renting vs. Buying: Which Makes More Sense?

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Buying a home is a big decision, and some people wonder if it is better to rent instead of making the leap into the world of home ownership. There are some benefits to renting and other benefits to buying a home, and you should consider the benefits of both before you make your decision.

Are There Benefits to Renting?

The main benefit to renting a home instead of buying it is the fact that you aren’t tied to a specific location, and you have more freedom to move if the need arises. If you aren’t planning to stay in one location for an extended period of time, then it probably makes sense to rent a home.

Comparing Payments: Rent vs. Mortgage

When comparing rent and mortgage payments, it is easy to assume that the dollars are created equal. But, there are some financial benefits that can be gained from a mortgage payment that are unavailable from rent payments. For example, if you are spending $2,000 per month on a mortgage payment instead of the same amount on a rent payment, then you will be able to write off some of the mortgage interest costs on your taxes, which can work out to be a savings of thousands of dollars each year.

Most mortgages in this market are setup with a fixed interest rate, giving you the opportunity to pay down the principal of the loan each month. Once the loan is paid in full, you will have full ownership of the home allowing you to live there without a rent or mortgage payment.

As you continue making mortgage payments on a home with a fixed-price interest rate, the loan amount will get smaller which means that you will have more equity in the home. If you decided to move to a different home, then that equity can be used to reduce the loan amount on the next home that you buy. You won’t be able to gain these benefits with a monthly rent payment.

Talk to an Experienced Professional

If you are trying to decide whether renting or buying is a better option for your individual situation, then the best approach is to talk with an experienced real estate professional. Contact Elite Properties Direct at (951) 473-0390