Buying a home is an exciting thing, however, the decision to move from renting to buying is a big one that requires thoughtful thinking and a lot of research. How do you know which is right for you? Ask yourself the following questions to help determine whether renting your home or buying for the long term is the right decision for you and your needs.
Do You Want to be Responsible for Maintenance?
One of the biggest perks of renting a home or apartment is that your landlord is generally responsible for ongoing property maintenance, repairs and upgrades. As a renter, you are not responsible for the cost or the labor of fixing broken appliances, maintaining the structure of the home or other costly and time-intensive maintenance tasks. If you own your home, however, you are your own landlord and those responsibilities become your own. If you are ready for the costs and the responsibility of home maintenance, you might be ready to buy. However, if you would rather your landlord handle it for you, renting might be the best choice.
Do You Plan to Stay in One Place?
When you rent, you have a lot of freedom to move when you please, or when your work or family life requires it. If you get married, have children, change jobs or just want a change, leaving a rental home is as easy as waiting out your lease. This being the case, renting might be the best choice for you if you don’t plan to stay in one location and in one home for long, or if you anticipate big changes not far down the road. Buying a home is a huge financial commitment that you can’t easily walk away from if you change your mind. However, if you are committed to staying in one place for at least five years (the amount of time it takes for buying to be more cost-effective than renting) and don’t anticipate your needs changing very much, buying a home might be a great decision.
Do You Want an Investment, or Just a Place to Live?
When you buy a home, you’re doing a lot more than just purchasing a place to live. As a homeowner, you will have real estate assets that you can leverage for your future. Buying a home isn’t just buying a house—it’s a long-term investment that can help to secure your financial well-being for many years to come. However, if you are not interested in a long-term investment, buying might not be the right choice for you. If you would rather have just a place to live that you don’t have to worry much about, renting might be your best option.
What is Your Tax Situation?
There are many financial advantages to renting and buying, but both have different upsides and downsides when it comes to taxes. Buyers may receive tax deductions and other perks for being homeowners, and can usually write off a portion of their mortgage interest to decrease their tax bill. Eligible buyers can also use the Mortgage Credit Certificate to save up to $2,000 a year on their federal tax bill. However, homeowners are also responsible for property and other taxes that renters may not have to pay. Talk to your tax professional to see how your taxes may be affected by your choice to purchase a home or to rent one.
How Much Do You Want To Make Your Home Your Own?
If one of the biggest perks of renting is that renters are not responsible for repairs and maintenance, one of the biggest corresponding downsides is that in general, renters have less freedom to customize their homes to fit their needs. While homeowners are responsible for maintenance and repairs on their own homes, they also have more freedom to do with their homes what they please. This means that homeowners can make updates, upgrades and more, with the only required permission being from their city or homeowner’s association.
Buying a home is a big decision, and not one to take lightly. To learn more about home ownership and to help you decide if buying or renting is the right choice for you, visit www.nchfa.com/home-buyers.
