The Benefits of Owning Versus Renting a Home
Utah ranks as one of the fastest growing states in the nation. The housing market is ripe with opportunities. You may know people in your life that are looking to buy or sell a home, prompting you to consider your own living circumstances.
Perhaps you are renting with roommates, living in your in-laws’ basement, or you want a change from the home you bought years ago. It’s important to know the benefits to both renting and owning a home before making any decisions.
Let’s take a look at some of the benefits of renting versus owning a home so that you can be an informed tenant or first time home buyer.
Renting a home is generally associated with a younger phase in life before “settling down.” One may rent with multiple roommates to split the cost, which is certainly a benefit.
Renting can also be a good option if you feel you may move a lot, due to a change in jobs or other extenuating circumstances. This is why it may be something you want to do when you’re still experiencing a lot of change in your life.
In fact, this is perhaps the standout advantage to renting: the flexibility. Depending on different leases, you could find a month-to-month contract that best suits a changing lifestyle and supports the ability to move out whenever needed.
A final benefit to consider when renting is that there is less pressure and responsibility as a tenant to keep up the house. Any repairs or issues with the property you’re renting can be directed to a landlord who will cover the cost and take the time to fix any problems.
Owning a home has a great many benefits, perhaps more so than renting. The benefits of home owning tend to be more long term, and it can take a bit more sacrifice and time to reap them, but it will be extremely rewarding and lucrative when you do.
In contrast to splitting the rent with roommates, when you own your own home you will pay a monthly mortgage. The beauty of this payment is that, unlike rent, the amount owed is less likely to drastically increase with regular frequency. You may experience an increase in property taxes from time to time, but such increases would likely affect your rent as well, so it’s better to deal with those increases when you’re investing in yourself with your own home. Furthermore, if interest rates come down, you can always consider refinancing to bring down your monthly mortgage payment or to help you pay off your home faster.
Regardless, a more fixed monthly payment is great for both budgeting and peace of mind. You can feel confident that any increase in the value of the area you’re living in will only serve to benefit you. Which leads us to the next benefit.
If you rent you could find yourself financially, physically, and possibly emotionally at the mercy of your fellow roommates and or landlord. Sharing a space with others, and particularly those that you might not have had plans to share a space with, can be taxing.
If you own your own place you can decide if it will just be you, you and your family, or perhaps you will have roommates to help supplement your mortgage. If that’s the case, the beauty of owning the property means you can decide who lives there, and you can also decide if it’s not a good fit at any time. You can also house any furry friends that may not be welcome at some rental properties!
Along with the independence of being in charge of who lives at the property comes the ability to increase the curb appeal of the home without the fear of breaking a landlord’s rules. You could install fixtures, paint or wallpaper the walls, change the flooring, and on and on with no repercussions! In fact, if you do so correctly, you can even add to the value of your house, which is what we’ll address next.
Arguably the most significant benefit to buying a home is that it’s a major investment that can pay off in multiple ways. As you make payments, you contribute to the equity of the home. Why do you want equity? Because should anything happen, equity can be converted into cash, or you can use equity in attaining a loan or line of credit.
Down the line you can also rent out or sell your home—another reason it’s a great investment. It’s a huge win to not only be able to live in your own place, but to turn around later and get positive cash flow from it.
If you do choose to rent it out, and being a landlord doesn’t interest you, you can always hire a property manager. If you sell it while the market is in a good place, you’re looking at a great financial gain, and the ability to move on and up to better properties!
Now that you know some of the key benefits to renting versus owning a home, try taking a look around your area to see what your options are. Ask yourself what the market is like right now, and the general direction it appears to be going in. Check out what people are paying for rent in the area you’re interested in, or the current prices of condos, townhomes, or single family homes near you.
For even more details on buying a home, check out: