Buy Vs Rent Pros And Cons: When I told my 13 year old daughter
that I was writing this series of pages about buy Vs rent, she pointed out that I had to make clear the pros and cons of each.
So that started me thinking and although through the series I make some clear differentiation, following that advise, I would like to emphasize these four areas:
Repairs and maintenance – renter maybe ahead on this one as any of these issues with the property will be paid from the landlord pocket book.
Mobility – those who anticipate the need to move in less than four to five years, perhaps should consider renting as the better alternative
Tax Deductions – there is a clear advantage for homeowners who have a slew of taxes that they can deduct from their gross income …Renters have none! Please check this page for in depth info on this topic Buy Vs Rent Tax Advantages
Creating wealth – payments that you make every month can help generate wealth for you …or your landlord.
Let’s examine each of these topics with a bit more depth:
Rental – when something breaks down you call the landlord …the furnace breaks down in the middle of the winter or the A/C goes caput in the middle of a heat wave – your landlord will interrupt his vacation to send a repair technician or bring you a new unit …hail storm all but destroys the roof – call the landlord …a tree comes crashing down in the middle of a winter storm …here comes the landlord and his chain saw
As a renter, your attachment to the place has a set date to expire …you are presented with noisy neighbor – that may be short lived …you did not realize that your new place presents heavier traffic than you anticipate – start consider a neighborhood closer to work …place is too far from your favorite restaurants – relief might been in your near future because a rental agreement is customarily for a year and you can be moving then
Conversely, as a homeowner, you need to stay put for a while – I recommend to buy and live in the home for 4 years …5 years is better.
There are costs involved in selling a home and the home may not have appreciate enough to make it even …unless, you consider the paid in mortgage as ‘living expenses’ and you have to take in consideration that you would have to pay rent elsewhere. ;- )
I recently heard of situation where a couple bought a townhome that is was in need of some repair …after they spent a good amount of money to upgrade the place, they moved in just to discover that they have a ‘not so friendly’ neighbor
…it is said that the neighbor complains about noise all the time AND the neighbor does NOT like kids …the new owners have grandkids that they would like to have over often …not exactly an ideal situation and being homeowners, it makes it rather difficult to uproot and go somewhere else…
I also happen to think on those good men and women in the military who are subject to sudden moves
... so perhaps this is the only instance that comes to my mind when rent will be more advisable over to buy a home.
Homebuyers have a lot of tax income deduction from what the pay into their mortgage and property taxes [Please follow this link to visit my page Buy Vs Rent Tax Advantages]
…renters can deduct ‘nothing’ – a round zero!
Homeowners accumulate equity as times goes by. When you sent in the first mortgage payment, ‘a few dollars’ in that payment is yours! Please visit my page Mortgage Monthly Calculator – you will be dazzled with the number it will display in front of your eyes
Please visit my companion page of this series to learn more about Buy Vs Rent Creating Wealth Organically
Renters can live 10, 20 years in a place paying the rent on time and not a single dollar will be accumulated to their names …not a single penny actually! :- (
But you would make your landlord a very happy person indeed because you have made them a very good egg nest! ;- )
Knowledge Base - This series dedicated to explore the Buy Vs Rent quest is comprised by 8 intertwined articles. I recommend that you further your knowledge by reading all of them - enjoy …AND learn!
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JC Fagundes, Associate Broker
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