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Buying vs. Renting: Pros and Cons


buying after bankruptcy

The rent vs. buy debate is a hot topic that can attract mixed reactions. Is owning a home cheaper than renting? This common question usually pops up when one is deciding whether to make the transition from renting to homeownership. Each of the two options has its benefits and considerations, and the decision to settle on either can be determined by several factors depending on your current financial status and objectives.


Before you decide to either buy or rent, ask yourself the following questions:

  • How much can you afford?

  • What are your career and family goals?

  • Are you planning to relocate, or do you want a permanent home?

  • Are you interested in stability or flexibility?

  • Are you ready to handle home repairs and routine maintenance?

Asking yourself the above questions can help move you in the right direction. Let’s go over some of the benefits and considerations of each:



Benefits of Buying a Home

Stability- If you are looking for stability rather than flexibility, consider buying a home. When applying for the ideal mortgage, you can seek a fixed mortgage rate from your lender so that you can have predictable monthly payments. When you choose to rent a house, you must be prepared for unpredictable rental prices. When inflation or demand for housing increases, rental prices can increase drastically, and you may be forced to either pay more or move to a cheaper property if you can no longer afford the payment on your current rental.


Equity- A home is a long-term asset, so not only will you have a place to call home, but your new purchase will likely serve as a long-term investment. A real estate property usually appreciates in value over time, so when you finally decide to sell, you may find that you have significant equity gains on the home.


Tax Benefits- When you decide to buy a home over renting, you can benefit from certain tax discounts that come with homeownership. Most first-time homebuyers enjoy a considerable amount of tax savings when buying their first home. While the tax relief and homeownership benefits vary depending on the state and the amount of down payment, the main idea is that you will make savings on various deductions when servicing your mortgage or paying property taxes. This is a unique opportunity only available to homebuyers.


Freedom and Lifestyle- When you are renting a house, you will enjoy limited rights, as you must get the landlord or property manager's approval before you can make any home improvements. As a homeowner, you are no longer under the commands and rules of another property owner. You will have the freedom to make changes to the interior and exterior of your home to reflect your lifestyle and taste.



Considerations of Buying a Home

Capital is required- Buying a home is one of the most significant financial investment decisions you can make in your lifetime. You must have a reliable source of income to account for your purchase, along with other expenses that come with owning a home.


Property value can depreciate- Although property values historically rise over the long-term, this rise does not go up in a straight line, and there are dips from time to time as the market adjusts and corrects. Changes in property prices will have a direct impact on your home’s equity.


The homebuying process can be intimidating- There's a lot to learn when buying a home, and first-time homebuyers can feel overwhelmed, especially when they are not surrounded by the right industry professionals. When buying a home, it is always advisable to engage a reputable real estate agent and lender, as they can help you navigate the local market and the buying process.


Routine maintenance and repairs- When you buy a home, you will be responsible for making all necessary repairs and improvements to your house. If you do not choose the right property from the start, you can end up incurring repairs that can be costly and time-consuming. Remember that although maintenance and repairs are a part of life as a homeowner, home warranties and home insurance can help cover these costs and bring peace of mind.



Benefits of Renting a Home

Affordability- Renting a house can be an affordable option, especially when considering initial costs. You can typically rent a house that matches your current financial status with fewer upfront fees and less paperwork.


More flexibility- When you rent a home, you can relocate to another state anytime and with much ease compared to owning a home. A home is an immovable asset and when you have one, it will limit your freedom of movement unless you sell and buy another one.


Low maintenance costs- When you rent a home, most of the repairs and routine maintenance are handled by the landlord. Therefore, you will have peace of mind knowing that you will not incur many extra costs.


Peace of mind- When you are renting a home, you will be less worried about declining home prices compared to a homeowner who is tracking property values and property taxes.



Considerations of Renting a Home

Rent fluctuations- Rental prices are unpredictable and can increase at any time, which can make renting an expensive and stressful affair compared to purchasing.


Limited freedom and privacy- The landlord will give guidelines on how to use their property. This includes decisions on whether pets are allowed, whether rooms can be painted, and in some instances, whether you can hang anything on your walls.


Owner turnover- Rental properties can be sold to another investor at any time, in which case you will be dealing with a new property owner on short notice.


No tax benefits- Renters do not enjoy tax benefits like homeowners do, thus losing out on such savings opportunities.


Limited flexibility- Although you do have the flexibility to pick up and move without selling your home, you will be unable to do so easily in the middle of your lease. Most landlords will require you to finish paying out your contracted lease before they will release you from it.



Final Thoughts

It can be difficult to decide whether to buy or rent, but by carefully analyzing the pros and cons of both housing options, you will be able to make the right choice based on your current financial status and goals. There is no one-size-fits-all decision when it comes to homebuying, but at Streamline Home Loans we are happy to give you an honest assessment of your situation to help you figure out if now is the right time for you to purchase.



About Streamline Home Loans

We Streamline the Process. From loan products to loan professionals, Streamline Home Loans actively seeks out the best in the industry to help our customers find, and fund, the right mortgage for them. Streamline's model is designed to raise the bar on efficiency, relationships, and integrity. We specialize in product variety, experienced teams, sophisticated software, and quick closings. We currently have multiple locations in NV, with licensing in AZ, CA, CO, FL, GA, NM, SC, and TX. Corporate NMLS# 1810048. Corporate headquarters in Las Vegas, NV.


For more information about Streamline Home Loans, visit us online at streamlinehl.com or call (877) 405-3747.

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