To Buy or To Rent?
It’s the American dream. White picket fence. 2.5 kids. Home that you own. Scratch that. It was the American dream. There are so many dreams out there are as unique as the people dreaming them. But for many people, owning a home is still a part of that dream. But choosing to purchase a home—or to continue renting—can have a huge impact of your financial and personal life. Buying a home may not be the right option for everyone. Let’s break down the options.
Renting
The general attitude toward renting is that you’re throwing money away every month (or throwing it at a landlord). And while you’re not gaining equity with each payment, as you would if you owned a home, you’re still spending money in exchange for a place to live. One benefit of renting is that you know ahead of time how much your housing will cost each month. There are no unexpected expenses or repairs to be made. And if there are, it is not your responsibility to pay for them.
Renting also offers more flexibility. When you purchase a home, you’re making a long-term financial decision and, most often, you’ll need to stay put for at least several years. When you rent, you can move at the end of the lease.
Owning
Homeownership allows for more control over the property (think: painting your walls or renovating the bathroom). But changing your mind after you purchase a home can be expensive. You may not be able to sell your home when you want to and, in some cases, may even lose money.
The overall cost of owning a home is usually higher than rent, even if your mortgage payment is lower than your rent payment. Homeowners have to foot the bill for property taxes, utilities, pest control, insurance, and mortgage interest. Not to mention, if anything goes wrong on your property, it’s your responsibility to fix it or pay for someone else to. Unexpected maintenance and repairs can cost you thousands of dollars.
If you’re leaning toward homeownership, a home loan through Andi’s partner, NOLA Lending, might be perfect for you, especially if you’re a first-time homeowner. Already a homeowner but struggling with unexpected costs or repairs? Andi can help with that, too! Check out our Personal Loan options for things like replacing the A/C or hiring an exterminator to get the possum out of the attic.
So Which One Is Right for You?
It depends. You not only need a pretty substantial down payment saved up to purchase a house, you’ll also want a bigger emergency fund for unexpected repair costs. If you feel financially stable, have a strong savings account, and are ready to settle down in one spot, then you might consider purchasing a home.
If you like the freedom to move around and the reliability of a rent payment, then renting may be the right option. It’s also worth noting that some rental properties come with added features like recreational and exercise facilities, maintenance, trash service, and other benefits.
The short of it: there’s no wrong answer. Only what’s right for you.