Whether you decide to buy or rent a home, there are pros and cons that come with both options. In this article, we’ll take a closer look at some of the advantages and disadvantages from buying or renting a home.
Advantages of buying a home
- A home’s value appreciates over time. If you decide to sell in the future, you may earn a profit from the sale.
- As a homeowner, you get long-term benefits of equity, security, and a potential increase of your personal wealth.
- Purchasing a home makes it your legal property, giving you freedom to use it sans any restrictions and regulations typically imposed by a landlord.
- You get creative control over your home, allowing you to make renovations and any changes according to your personal needs and style.
Disadvantages of buying a home
- There are more upfront costs when you buy a home, such as the down payment, closing costs, and legal fees.
- Owning a home is a huge financial responsibility. In addition to your mortgage, you’ll need to deal with additional costs including taxes, rates, insurance fees, and repair and maintenance costs.
- Compared to a tenant, a homeowner has less mobility. Tenants who choose to relocate will only need to fulfill the notice period (typically one month), while a homeowner will need to sell his or her home before relocating, which can take more time.
- Earning a profit through resale is not guaranteed, as a home’s selling price will depend on economic factors such as interest rates, recession, or other factors that may make the location less desirable.
Advantages of renting a home
- Renting gives you more flexibility compared to owning a home. This can work to your advantage especially if you’re expecting changes, like job relocation. As a tenant, you get no long-term commitment which is ideal if you don’t plan on staying in one place for an extended period.
- Renting allows you to live in an area where you cannot afford to purchase a home.
- Moving out is less stressful for tenants, as it is the landlord’s responsibility to find someone else to take over the lease or buy the property.
- Once your rent is covered, you have additional funds which you can choose to invest in other things, like saving towards purchasing your own home.
Disadvantages of renting a home
- As a tenant, you need to adhere to rules in the lease agreement, which limits your freedom to use or renovate the property according to your needs.
- You need the consent of the homeowner or landlord if you choose to make any changes to the property.
- Renting does not provide return on investment or opportunities to increase your wealth, since you will never legally own the rented home.
- A tenant has no control over annual rental fluctuations or whether or not the lease will be renewed upon expiration.
Looking to buy or sell a home in Chelan, Manson, Orondo, Brewster, Pateros, Twisp, or Winthrop, or other nearby communities? Get in touch with Coldwell Banker Lake Chelan Properties at 509-682-7777, or send an email to info(at)cbchelan(dotted)com.