Real Estate

How to Know If It’s Better to Rent or Own

Essential Concerns When You Become a Landlord

Purchasing a home is likely to be the biggest financial decision you’ll make in your life, which is why it’s important to give it plenty of thought. If you’re currently enrolled in The George Washington University in a paralegal degree online program and paying for books and tuition, making wise financial decisions is the key to a prosperous future. So how do you know if it’s better to rent or own? Here’s a look at some pros and cons of both.

The Pros and Cons of Buying

Of course, purchasing a home or condo comes with a wide variety of pros and cons. Here we’ll take a look at just a few of the standout factors to be aware of. When it comes to pros, most people are aware of the top one – and that’s the fact that you will be creating equity in the home as you pay it off. At the end of your mortgage you will obviously own your home; ideally it has appreciated in value by that point.

Owning a home also gives you the ability to make changes, both inside and out, as you want. You don’t have to get a landlord’s approval to do something as simple as paint a wall. You also have the pride of ownership. Owning your home can also carry with it a number of tax benefits. You’ll have to look into what your state offers. If you’ve got enough space you can consider renting a portion of your home and then turning it into an income opportunity.

Just as there are pros, there are also cons involved. Owning a home does require a substantial amount of money upfront for the down payment and closing costs. Obviously this can be hard to save and come up with. As well, you will be faced with maintenance and repair costs over the years, you’ll have property tax to pay, utilities, the cost of furnishing the home, and there is no guarantee the house will appreciate at the rate you hoped. Mortgage rates also fluctuate from year to year, so it can be hard to budget your mortgage payment five, 10, or 15 years from now.

The Pros and Cons of Renting

Renting also comes with its own list of pros and cons. Pros include such things as the fact you aren’t locked in for years. In fact you can even find places on a month-to-month basis. If you move around a lot, this is ideal. Rent can be cheaper on a monthly basis considering you don’t have property tax to worry about, and you won’t have to worry about repairs and maintenance to the property.

As for the cons, the big one is the fact you are paying money for something you will never own. You aren’t building equity. You are also limited in the changes/renovations you can make to the space. The majority of places will require a background check and first and last month’s rent.

Making an Educated Decision

As you work to complete your paralegal studies online and secure your future, it’s wise to start also thinking about the pros and cons to buying versus renting so you can make the best financial decision for you.