Advantages vs. Disadvantages of Renting or Purchasing a Home

Renter:

• There is a pet policy that does not allow pets to live in the rental property. If pets are allowed, there would be a pet rent of $100/month along with a pet deposit.

• Subleasing the rental unit might be restricted, thus reducing the possibility of pocketing extra cash while away.

• Rent is not tax-deductible, meaning it doesn’t help you save on income taxes.

• Rent can increase. Rent control laws protect some properties from rent increase up to a certain percent/amount each year. Therefore, it is vital to research the rules for the same building you are about to lease.

Owner:

• Purchasing a home can be an extensive process that can last a few months. It can be challenging to buy a property versus renting one. You need to plan for a down payment, how much mortgage you can get based on your income, complete the escrow process, etc.

• Mortgage interest and property taxes are tax-deductible.

• Real properties generally appreciate over time.

• Your home is your asset. That means you can leverage it, for example, take a line of credit (LOC) out to finance your projects. Or treat the LOC as a rainy day fund.

• Inheritance. You can pass on real properties to your heirs.

• In 30 years, you will generally have paid off your mortgage. Your housing cost will drastically decrease.

• As an owner, you will have full autonomy over your property regarding improvements and repairs. You don’t need to ask for permission to repaint your walls.