Why buying is almost always better than renting in the long run.
Should you rent or buy? I talk to many people who think it makes sense for them to rent long term; however, I believe that buying a property will always be the correct financial move in the long run. Today I’m here to talk about why some people choose to rent and a few of the advantages of buying a home.
First, let’s explore some of the reasons why people think about renting. One of the best benefits is that you don’t need to pay for repairs. If the sprinkler systems have an issue or there’s a leak in the roof, you don’t generally have to pay. There’s also a lot more flexibility. Since you aren’t tied to a property, you can leave or move to a new area whenever you want.
Finally, people mention all the time that high interest rates are pushing them towards renting. Maybe they might like to purchase a home someday, but they’d rather play it safe for now and wait for mortgage rates to go down. It’s certainly true that you don’t have to worry about interest rates if you’re renting, but there’s a downside to this that I’ll discuss later.
Now let’s explore some of the cons of renting. I’m a little biased as an agent, but the data backs me up: Buying a home is a better financial decision in the long run. If you only plan on living in an area for six months or a year, buying might not make sense. However, there are many long-term benefits to owning your home.
First, your mortgage payment is locked in, so even though rates are a little higher than we’re used to right now, your payment won’t go up after you close. On the other hand, rents historically increase with housing values. That means it might not take long for rental prices to catch up to or even eclipse what your monthly payment would be, even with our higher rates.
Next, you’re the owner, so you don’t have to be at the mercy of a landlord. You may be living in the perfect rental right now, but if your landlord decides to kick you out or increase your rent, there’s not much you can do. Also, owning a home comes with many tax benefits. You get to write off interest on your mortgage, and you get appreciation. There’s a reason that homeowners, on average, have a much higher net worth than renters.
At the end of the day, it just makes financial sense to purchase a home in most situations. If you have questions about this topic or anything else, please call or email me. I am always willing to help!