This is an ongoing discussion with real estate agents and buyers. The economy has been strong, creating stabilized housing prices and decreased mortgage rates. We are also seeing many cities have a drastic rise in apartment and home rents. This is discouraging to renters who find it difficult to pay rising rent prices. We come to the question of “why would I put this money into rent and not a home mortgage?” Let’s walk through the pros and cons of renting vs. buying.
Pros of renting a home
- You don’t need to have a large amount of money for down payments, closing costs, insurance, etc.
- Your property manager or owner deals and pays for maintenance (in most instances)
- You can easily move out
- Allows you to build credit
Cons of renting
- Your rent can fluctuate
- You are not building equity
- You may not be able to make it your own (painting and remodeling)
- You can’t receive tax benefits such as deduction on mortgage interest payments or federal income tax.
Pros of buying a home
- Can be a great investment
- It helps you build equity
- If you choose a fixed mortgage you don’t have to worry about increasing rents
- You can receive multiple tax benefits
Cons of buying a home
- You will have to do your own maintenance
- You will have to pay a down payment and closing costs when purchasing
- Your home may lose value if the mark depreciates
The discussion of buying a home vs. renting goes on. It comes down to your situation and plans. In the long run, it is beneficial to own a home, It is a good investment and can give you a sense of security. If you are interested in buying a home in the Austin Texas area, we would be happy to evaluate the benefits of homeownership.