Buying or Renting: Which Option is Right?

More space and a secure investment for the future: home ownership offers many advantages. Nevertheless, the fundamental question arises: should people buy or rent? The post below tries to offer some insight.

Owning a home

Owning a home is a lifelong dream for many people: 81 percent of Americans would like to buy and live in their own home. Thanks to lower interest rates, 2018 is showing favorable signs. Mortgage loans with a fifteen-year term have one of the most decent APR rates in recent history, which is one more reason to answer the question: “Should an interested party rent or buy their next home?”

Buy or rent? Both have advantages

Whether it’s the better alternative to rent or buy depends on each person’s individual living conditions. Tenants enjoy advantages just like homeowners do. They remain flexible in the choice concerning their place of residence and hardly need to worry about the maintenance of the house or apartment.

If the roof needs to be renewed or the HVAC system is down, the landlord is responsible. For people who want to stay flexible and for those who value their independence, renting a home can be the best solution – even if the monthly rent is around the same price as a monthly mortgage.

Security is important

If a person wants to stay in the same home for at least ten years and have a secure job, they will probably be happier in owning a home than trying out a rental property. Under certain conditions, it is worthwhile to rent over buying. Real estate financing is usually 20 to 30 percent more expensive than the rental of a comparable property.

Real estate transfer tax, notary fees and other financing costs make up about 12 percent of the final housing price. This money is lost in the case of a resale. Experts recommend 20 to 35 percent equity for a meaningful financing plan.

The additional costs associated with a property are at least $100 higher than a rental property each month. For example, property tax and insurance premiums are added to the total costs. Visit this URL to learn more.