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You and your family need a place to live. Do you want to rent, or do you prefer to own a place of your own? There are advantages and disadvantages to both options–and understanding your options is critical to making the right choice for your family.
The Advantages of Renting
For many people, especially those with poor credit or who haven’t had a chance to build their credit, renting is a more effective method of securing a great home for their family.
There are several key advantages:
When you rent, someone else is responsible for repairs and maintenance. While you may be responsible for taking care of any damage you cause to the home, you won’t have to worry about wear and tear–for example, the roof wearing out, or the hot water heater needing to be replaced. When you buy your own home, on the other hand, you’ll always be responsible for those expenses yourself.
Renting is often a better short-term option. Many service members find that it’s more practical to rent a home than to buy one, especially if they’ll only be in the area for a couple of years before they move on. Renting makes it easier to move on to a new location.
Renting costs less up front. While you’ll need to make a deposit and pay for a number of expenses up front, buying ultimately costs a lot more out of pocket up front–and for people on a tight budget, that can make a big difference.
When you rent, you don’t have to worry about property taxes. Come tax time, this can make a big difference in the burden you’re facing.
Owning your own home is a key part of the American Dream. Eventually, many people want to be able to settle down and enjoy the security and privacy of owning their own home–and it does offer many advantages.
When you own your home, you build equity as you pay the mortgage each month. Your home will often appreciate in value over time, and the longer you own the home, the more you pay into it–and therefore the more it’s worth. When you rent, on the other hand, you’re building equity into someone else’s property.
You control any changes and renovations to your property. When repairs are needed, you get to decide how they’re handled. All the decisions regarding your property are yours alone to make–and you don’t have to worry about getting someone else’s approval.
Improvements to your property will help you improve its value. Instead of losing money on improvements that won’t gain you anything when you move out, your property improvements are actually an investment.
You don’t have to abide by other people’s rules. You can have the number of kids and pets you want, and your only noise restrictions are local laws.
There are several tax advantages associated with buying your home. You can get many tax deductions based on your mortgage and property taxes, which can offer a number of benefits as you’re managing your personal income taxes.
Whether renting or buying is the right choice for you will depend on a variety of factors. Many people choose to wait until they are in a better financial position before embarking on the journey of home ownership. Others find that renting is more practical until they are ready to settle down in a specific area or have made it past other key milestones. Do you need more advice about renting or buying your home? Contact us to receive quality financial advice and perspective that will help you make those key decisions.
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