When searching for a place to call home, one of the most important decisions is whether to rent or to put down roots and purchase a home. This article aims to point out some key differences between the two and to provide insight on which option might be right for you. Key considerations that may influence your home search process include recurring expenses, access to amenities, and whether you prefer living in a community atmosphere or in a single-family home.
For most, the largest portion of the household budget is spent on either the mortgage or the monthly rental payment. So, it follows that expenses will be a big factor in deciding between leasing or home ownership. Specifically, how taxes and insurance, and maintenance of a purchased home differs to the relative flexibility of a leased property.
A stark difference in cost when comparing leasing to ownership is the amount you pay in taxes and property insurance. Traditionally, property taxes and insurance are paid by the owner of the property. In this instance renters are spared this expense except for being required to provide renter’s insurance for the personal property in their unit. Another important distinction involves maintenance requirements. Since tenants do not have ownership of a unit, the owner has certain responsibilities to keep the property in repair. The landlord, or property manager, oversees most major maintenance expenses including roof repairs, structural problems, and preventative maintenance, whereas homeowners are responsible for these costs themselves. Since most residential leases are one-year terms, those who need flexibility may prefer this option to the alternative. One of the major benefits of ownership is that it allows you to build equity in your home with each payment made and reduce the amount owed, until the property is owned free and clear.
Available amenities are another factor to consider while making the decision to rent or purchase a home. Pools, fitness centers, media rooms, and resident clubhouses are oftentimes what makes living in apartment communities desirable. Because the costs associated with using the amenities are included in rent, residents can enjoy the luxury of having these amenities at their fingertips without the added stress of upkeep. On the other hand, homeowners can enjoy their amenities such as a pool or back-yard privately rather than having to share with neighbors. While they can enjoy this privacy, they are also responsible for the routine maintenance associated with these features. Homeowners are also able to use the amenities without any rules or restrictions often enforced by an apartment community.
Finally, you may want to consider the amount of freedom allowed to make changes to your living space while deciding whether to rent or buy. Many landlords are very strict when it comes to renters making significant structural changes, renovations, or décor changes to the property. Bound by the terms of the lease, tenants are often unable to make changes as they would like while in their rental home. Homeowners, however, legally own their home and can decorate, renovate, and make changes at their desire. To some, the freedom to express themselves is a very important part of transforming a living space into a home.
There are many factors that play into making housing decisions. It is recommended that you consult with a REALTOR® when deciding which option is best for your current situation. Happy house hunting!