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.

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