More than 100 million Americans currently rent their homes, and they're outnumbered two to one by those who are homeowners.
Are you considering buying your own home? Have you been wondering about the benefits of renting a house instead of buying (or vice versa)?
If you're not sure whether buying or renting is a better option for you, keep reading. Everything you need to know is explained down below.
Pros and Cons of Renting a House
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There are plenty of benefits that come with renting a house, but there are some noteworthy drawbacks as well. Keep all these pros and cons in mind if you've been thinking about renting:
One of the greatest benefits of renting a house is that you don't have to do as much maintenance. When something goes wrong with a rental home, such as a leaky roof or a plumbing issue, you're not responsible for fixing it. You can call your landlord and they will take care of it (or hire someone to take care of it) for you.
If you're a busy person who doesn't have a lot of time to handle repairs or wait around for repair professionals to come to you, renting can fit better with your lifestyle.
Many people also prefer to rent because they don't want to feel locked into one place for a long time. Most leases only last one year. Once that year is up, you're free to pack up and move on to another destination.
You also don't have to worry about trying to sell your house in a less-than-ideal market because you need to move for a job or family obligations.
There are also fewer out-of-pocket costs associated with renting. You don't have to worry about paying for things like closing costs or property taxes. You pay for your rent and your utilities and that's about it.
Of course, renting is not without its downsides. For example, when you rent a house, you're limited in terms of what you can do to customize it. Most landlords will not let you paint, change the carpet, or take other steps to make your house more of a home.
Sometimes, they'll approve nice upgrades that add value to the property. However, you don't get to reap the benefits of those upgrades (which you'll probably be responsible for funding) long-term since you likely won't be staying in that house for an extended period of time.
Another significant downside to renting is the fact that you're paying someone else's mortgage. You might be living in the property, but you don't own it, and you're not working toward owning it one day (unless you're in a rent-to-own situation).
This can be frustrating, especially when you consider the fact that your landlord can choose to sell the property at any time (within the terms of your lease), leaving you responsible for finding a new place to live.
Pros and Cons of Buying a House
Like renting, there are pros and cons that come with buying a house, too. The following are some of the most significant ones you ought to consider:
When you buy a house, you're making a long-term investment for yourself and your family. Once you pay off the mortgage for that house, it'll be yours. You'll just have to worry about paying property taxes and your homeowner's insurance premiums.
There also aren't any limits on what you can do to the property once you've purchased it (with the exception of local regulations and regulations put in place by your Homeowner's Association).
You can paint, redo the floors, add new carpet, or even add on a whole new room in many cases. The sky's almost the limit when you buy, and you have many more options when it comes to customizing the home and making it feel like yours.
Buying a home also comes with tax benefits, including the mortgage interest deduction. This tax deduction allows you to deduct all of the mortgage interest you pay throughout the year.
Thanks to the mortgage interest deduction, you can save thousands of dollars on your annual tax bill. Those are benefits you don't get to enjoy when you're a renter.
There are some downsides to buying a home that you ought to remember before pulling the trigger.
For example, you can't guarantee that, when the time comes for you to sell your house, that it will sell for the same amount that you paid for it.
Depending on the state of the housing market, you may end up having to sell your house at a loss. You might also find yourself turning to resources like this article to find out how you can sell your house for cash and get rid of it as soon as you can.
Because of obstacles like housing market volatility, as well as the additional work required to get a house ready to sell, you're much less mobile as a homeowner than as a renter.
This appeals to some, especially those who have young children or are looking to settle down. Sometimes, though, you need to be able to pick up and move with relative ease, and buying a home makes that difficult to do.
The costs of maintenance when you own a home can add up quickly, too. When you're responsible for covering all the repair costs, you can end up spending thousands of dollars to get and keep your house in good shape. This is especially true when you buy an older property.
Buying vs Renting: What Should You Do?
As you can see, there are pros and cons to both buying a house and renting a house. Now that you know more about these pros and cons, which one seems like a better fit for you?
There's no one right answer that works for everyone. Consider the benefits and drawbacks listed above and use them to come to your own conclusion.
If you need more advice on buying or renting a home, especially if you're working with a tight budget, check out some of the other articles available on our site. Our House and Home section is full of great resources.