Should you rent or buy?
Settling into a new job, new city, or a new stage of life can be exciting, but it can be a bit overwhelming, as it often means needing a new place to live. Graduating college means no more meal plans and dorm living. Moving across the country for that great new job means you can’t just extend your lease another year. It seems that making one major life decision requires another major life decision. The first part of that decision is often whether to rent or to buy. Both are legitimate options, and there are reasons for both. But when it comes to Millennials, the needle appears to be moving toward buying.
When you choose to buy, you build your credit with every payment and earn equity with each passing month. Buying your home offers you the freedom to remodel, build additions, replace floors and appliances, and to hang photos and decorations on your walls without feeling guilty. Your principal payments will reduce the amount you owe each month, giving you peace of mind. When April comes around, you can receive a tax deduction for the interest you’ve paid on mortgage, saving you money. In fact, depending on market conditions, buying could be more affordable than renting in the first place! Finally, homes tend to appreciate in value by about 1% annually, which means you’re likely to turn a profit when you decide to sell. Should you take advantage of your freedom to improve and remodel your home, you could make even more.
Of course, renting is still preferred by many who are unsure of how long they’ll be living in a particular area. A few months to a year is an easier commitment than a mortgage. Plus, paying rent and utilities is simpler than paying for property taxes, home owner’s insurance (though we’d recommend you get renter’s insurance), and possibly dealing with an HOA and its complicated rules and regulations about trees, pets, and lawn care. In fact, most apartment landlords take care of the lawn care and snow removal themselves, which means that tenants can spend more time in their apartment’s included pool, lounge or gym.
The simplicity, flexibility and the amenities of renting can be very enticing. However, the extra work of buying, owning, and maintaining a home pays dividends on your commitment. At the end of the day, choosing whether to rent or buy – just like choosing your home itself – is a very significant and personal decision. It’s important to carefully consider what is most important and best for you and yours.