Buying vs. Renting: Pros and Cons
Deciding when to become a homeowner is an important life decision. At Points West Agency, we’re dedicated to serving as a trusted real estate resource for you and your family, which is why we’ve put together a list of pros and cons regarding buying vs. renting a home.
Pros of Buying
Buying a Home Builds Equity & Credit
One of the top advantages of buying a home is that it will build equity and contribute to your overall credit score. Equity from making payments or increased value on the home can become a very valuable asset for future home buying. Data found by CoreLogic, a financial services company, states that home equity jumped 13.3% in the first quarter of 2018 alone.
Creative Freedom and Community Involvement
Becoming a homeowner comes with a sense of security and belonging, as long-term relationships with neighbors are created and maintained this way. Additionally, you have the freedom to decorate and renovate as you please. Since the home becomes your property, you are able to make the changes you want instead of going through a landlord for permission.
Potential for Profit
Purchasing a home creates opportunities for profit through resale if the home appreciates in value over time. You can also acquire extra income by charging rent for vacant rooms through sites like Airbnb and VRBO, as permitted by your HOA.
Cons of Buying
Buying a home comes with a lot of responsibility, especially financially. Payments have to be made on time and unexpected maintenance costs can add up. Talk with your trusted real estate agent about what’s realistic for you and your family based on your spending habits and desired lifestyle.
Risk of Loss
When it comes time to sell, there becomes a risk of losing profit on your home if the economy fluctuates or the area you live in decreases in value.
Moving Isn’t as Fast
Having the responsibility of owning the property can also mean that it isn’t as easy to quickly move if needed. Selling your house can take longer than expected and doesn’t always happen as rapidly as you’d like or originally planned. If there is potential to move, engage your real estate agent early to help guide you on the best practices and timing for selling your home quickly.
Pros of Renting
Renting a house is far less of a commitment than buying. If relocation is frequent and mobility is important to you, renting offers more flexibility and freedom to fit your needs.
Choosing to rent can give you more availability and access to areas you might not be able to afford buying. Since there is less financial obligation, there is more of a chance to branch out!
Upkeep on the house and utility costs are usually the responsibility of the owner, so renters don’t have to rely on paying for maintenance. However, landlords aren’t always expedient when it comes to making repairs, so you’ll have to be prepared to rely on the property owner’s timeframe to get things fixed.
Cons of Renting
Less Creative Freedom
Renting a house limits the amount of creative freedom you have within your living space. You are bound to the rules of the lease and usually have to ask the landlord for permission to make changes – which are not always allowed.
No Return on Investment
Renting a house does not generate any potential for profit or extra wealth. You are making payments that go towards the owner’s purchase. Also, according to the U.S. Bureau of Labor and Statistics, rental rates experienced an average inflation rate of 3.08% per year between 1999 and 2018.
No Control Over Lease
As a tenant, you do not have control over rental fluctuations that can occur throughout your lease. Also, there is always a chance that your lease might not be renewed once it’s finished or that you may be forced out of your home if rental rates increase too much year over year.
Ultimately, the decision to buy or rent comes down to your financial stability, desired lifestyle, and what you feel is best for you and your family. At Points West Agency, we are here to help make the decision easier and talk you through the many considerations. If you’re thinking about buying or selling a home in North Texas, our agents are here to help. For more information about the newest listings throughout Denton, Parker and Tarrant counties, give us a call at (817) 717-6036, or visit our Contact Us page.