Every single person in the world must have a place to live where they are safe, secure and protected from the elements. In general, there are two choices when it comes to shelter. A person can find houses for rent or they can buy a home. Each option has certain advantages and disadvantages. It’s a good idea for everyone to take their own specific circumstances into account when making choices about where they plan to live. What works for one person might not be ideal for someone else. Renting might make sense at one stage while buying a home is a good option at another point.
Your Present Circumstances
The single most important factor when deciding if you’re going to rent or buy come down to your present circumstances. People go through certain stages in life. As a baby, toddler and teen, people are reliant on their parents to make that decision for them. For many people, the first stage in life is when they move away from home for the first time. This may come when they’re heading to college, getting married or taking a job in a new place. Most people are not ready to buy at this point in time.
Renting allows for more freedom when it comes to housing choices. Many renters opt for what is known as a periodic lease. Under the terms of this agreement, the renter and the owner have the right to break the lease as long as they give notice within a certain timeframe. This kind of lease allows for maximum flexibility. Other types of leases also allow for use of property over a short period of time. That is a good option for someone who isn’t sure where they’re going to be in the next five years or even the next six months.
Buying a Home
Buying a home is another option that can work well for a lot of people. This is a highly popular choice. About sixty-five percent of all Americans will buy a home at some point in time. For many Americans, home ownership is a good idea with many pluses.
Homeownership lets people build up a nice nest egg. As the owner pays down the mortgage, they increase their savings. Home prices may also rise as the person continues to own their home. This can add to the person’s overall financial picture and their personal wealth. This kind of savings can also be used for other things. A person can opt for what is known as a home equity loan. These are loans that are only available to homeowners. This offers the homeowner lots of ways to pay their bills.
Renting and buying both have possible drawbacks. A renter may want to stay in a given location. However, they must leave because the owner of the home wants to use the space instead. Even if they have a lease, there are circumstances when the owner can break it. A homeowner can stay put in their home in most instances for as long as they can pay for costs such as the mortgages and the taxes attached to it. That allows them far more ability to stay in control of their own housing destiny.
People who buy homes are also given all sorts of tax breaks that are not available to those who rent them. Mortgage payments and property taxes are tax deductible but the rent isn’t. A homeowner can sell their primary home at a profit. This profit, unlike many other kinds of profits such as capital gains, are completely tax free. However, if the price of the home goes down, the homeowner find they’re underwater. That means the home is worth less than the present mortgage.
Making any kind of housing choice should be done carefully. The right choice helps anyone find their very best personal housing option.