It’s 2023, is it better to rent or buy?
This has been a long back and forth about whether it is better to rent from a landlord or buy your own home and be your own landlord. Let’s talk about the benefits and disadvantages for each, beyond the fiscal responsibility.
As times change and working from home is more common in this ever-changing housing market this decision to rent or buy could seem troublesome. It seems like the mortgage rates are going up, there are rent increases, and overall lifestyle changing with all impact the way you view your housing. Let’s break it down into 4 parts: Lifestyle, Financial, Investment, Customization.
Now that more people are working from home, there is more flexibility about where you can be while working. Working from home means no more commute to your job, so you can live almost anywhere! If you are unsure about where you want to be permanently renting makes much more sense, you can move at the leisure of your lease to try out different types of locations and areas. Renting offers up much for flexibility when it comes to that aspect. If you don’t work from home and need to stay where you can easily go into your place of work then owning your home may be better for you. If you are planning to live somewhere for more than 5 years and know you love where you are, buying is probably the better option. Do you have children or plan to have children? Are you living where you are ready to put down roots with children? If the answer is yes buying is also a better option over renting. Renting and moving often with children can feel unstable. Whichever you do, make sure you know the location you are in is a good fit for you and your lifestyle.
Owning your home has financial benefits even if it seems scary! If you are working from home and have an office in your house you can write off a portion of your mortgage as a tax deduction. Owning your own home does have its financial burdens, such as property maintenance and upkeep costs, which is something a landlord would typically take care of if you were renting. There are also unplanned expenses that as a homeowner you have to pay for out of pocket: did a tree fall or did your water heater explode? These are things as a homeowner you have to pay out of pocket, vs if you were renting most of these things would be taken care of by the landlord. However, because you as a renter are often not in control of making maintenance calls or schedules, you may end up waiting a while for the repairs to be made you requested vs if you owned your home you would be in control. Make sure to review a lease and see what is and is not included in your renting experience because every lease is different. Renting also puts an unstable unsureness about your living situation: will your landlord increase your rent? Will your landlord terminate your lease? These are questions that you make ask and keep renting from a landlord out of your control, when you own your home those are not in question.
Buying a home can seem really scary, it is a big purchase, a big commitment, a big investment. You can buy a home and plan to stay there forever, but if something changes you can keep a home you own and rent it out as passive income.
One of the biggest differences in renting vs. buying is the ability to truly customize where you live. Renting a place often means you have to leave it as is, or if you change anything it has to go back to the way it was when you leave. The changes you can make are limited, especially if you are interested in design or renovations. Owning your home means you can customize and change and make any updates you want – you are the boss! The only limit that can come about in homeownership are homeowners associations or condo associations if you buy in a building – before buying you will be presented with the association restrictions you must abide by, but often it is not fully limiting.
After reviewing your options and the differences between renting and buying what do you think is best for you?