Should You Rent or Buy a House: Advantages to Both

Renting, compared with buying, is a bit carefree. There is little maintenance to do, and trash is usually the landlord’s responsibility after you take yours to the dumpster. You may pay for electricity, but other utilities are likely included in your rent.  Now that mortgage interest rates have dropped substantially, many renters are now considering buying a home. But there are definite advantages to continuing to rent rather than buying a house.  So the question to ask is, should you rent or buy a house?

Rent or Buy:  Advantages to Renting 

• Buying a house often requires a large down payment, whereas the fee to move into a house or an apartment is usually one month’s rent in advance.
• The landlord usually takes care of maintenance and repairs.
• Renters have no property taxes to pay.
• Rent is a specific amount, and mortgages can fluctuate from month to month, depending on your type of mortgage.
• Moving is a lot easier as a renter. You just give notice to the landlord. You don’t have a house that you have to sell.
• When the market falls, you don’t have to worry about your home losing value.

Rent or Buy:  Advantages to Buying

There are certain things you need to consider before you begin your search for a house:

• Review your credit score to see if it is high enough for you to be given a mortgage. If your credit score is not in a range that mortgage companies prefer, there are ways to improve your credit score as short of a time as six months.

• Before you begin house hunting, it is a good idea to review your income and monthly bills to get an idea of what size house you can afford. While housing costs vary from location to location, you can still get an overall idea of what your price range is.

Make appointments with a couple of mortgage bankers and discuss your finances with them, taking all of the information regarding your salary, credit report, and bills with you when you meet with them. They can advise you what size mortgage you can get, and this will let you know what price range of houses you can begin looking at.

When you are considering buying a house, there are also extra factors you need to add into your considerations, such as:

• Setting aside a slush fund for maintenance and repairs
• Costs of decorating (painting, remodeling, etc.)
• Insurance and property taxes that will either be added to your monthly mortgage payment or need to be paid by you
• Trash pickup and other utilities (gas, water, sewer, and electricity).
• Homeowners association fees if applicable.

There are also replacements to consider with a house. Here are the average years things are supposed to last:

• Roofs: 15 to 25 years
• Air conditioners and furnaces: 15 to 20 years
• Faucets: 5 to 20 years
• Appliances: 8 to 10 years
• Lawn mowers: 5 to 10 years
• Carpets: 5 years
• Repainting: needed every 5 to 20 years.

Renting has its advantages, but so does home-ownership. The equity you build in your own home is almost like a savings account.