Renting Vs. Owning A House: Which Is Which?

Moving out to a new city can be difficult; it means leaving your family and friends and leaving the place you used to call home. Moving to a distant location will almost certainly force you out of your comfort zone, but on the other hand, it may also present you with exciting new opportunities and adventures. There is always at least one compelling reason to consider relocating to a different state. When people move to another state, there are times when it’s not just one reason but rather a potent mixture of at least several powerful motivations. It could be because of a job relocation, the desire for a new beginning, educational opportunities, or love. 

Let’s say you’re from Elmwood Park, Illinois, but you married someone from Logan Square, IL- chances are you will move out, depending on which place you decided to live in.

One of the biggest challenges when moving is finding a new place to live; you can either choose to rent an apartment or buy a new house, depending on your finances. So, if you and your partner, or maybe your new job require you to move to a new city, such as Logan Square, IL, you can either find a new home you can buy or look for an available Logan Square, IL, apartment for rent. In this article, we will help you decide which is a better option when moving: Renting or Buying? 

Below, we’ve listed five main advantages of renting and buying that can help you decide.

Advantages of Renting

1. No maintenance cost

When you rent a home, you won’t have to worry about paying for any repairs or maintenance because those costs are covered. This implies that if you rent a property, the landlord is the one who is fully responsible for its upkeep, as well as any improvements or repairs that may be necessary.

2. Flexibility

If you have a month-to-month lease on an apartment or house that you are renting, you have the flexibility to make a snap decision to move out whenever you like.

3. Cheaper

The decrease in monthly housing costs is one of the most significant advantages of renting. This is of utmost significance for those who are still young, as well as for those who are on limited financial means. If you are not renting a huge house worth hundreds of thousands of dollars, then your monthly rent will be significantly less.

4. No downpayment is needed.

When purchasing a home with a mortgage, you are typically required to pay a down payment that is approximately 20% of the property’s value. But on the other hand, as part of the rental agreement, renters usually have to pay a security deposit that is equal to one month’s rent, but most of the time, that’s all that there is to it. Nonetheless, they can still get this deposit back when they move out, provided that the rental property is in the same condition that it was when they moved in.

5. No Property Tax Bills

The fact that renters don’t have to pay property taxes is one of the best things about renting instead of owning a home. Taxes on real estate can be a substantial financial burden for homeowners and vary widely from county to county. In some areas of the country, the expenses associated with paying property taxes can amount to thousands of dollars annually.

Advantages of Owning a House

1. Owning a house is a good long-term investment.

Renting means paying your landlord each month and getting nothing in return. Forced savings makes homeownership a good investment. If we think about it, a 10-year mortgage will give you a home to sell at the end. However, you will never get your monthly rent payments back if you rent a property for ten years.

2. Freedom

Considering that it is your home, you are free to do whatever you want with it. There is no landlord that you need to answer to. Your plans for the future of your home are entirely up to you to decide. You are not required to ask your landlord for permission or make additional payments as a security deposit in the event that damages occur to the property as a result of your improvements or upgrades.

3. Possible tax benefits

You can enjoy short-term savings through annual tax write-offs, mortgage interest deductions, and other deductions based on your situation. These deductions frequently result in substantial savings, which are unavailable to renters.

4. Greater privacy

When you own a home, you don’t have to worry about your landlord or roommates prying into your life, both of which can be annoying at times. You are free to relax and pursue any activity of your choice without being bothered by other people.

5. Stable monthly payments

A mortgage with a fixed rate guarantees that your principal and interest payments will remain the same each month until the mortgage is paid in full. When a lease is renewed annually, the rent may be subject to an increase. It is possible for your monthly payments to change due to shifting property taxes or insurance premiums, but this occurs less frequently than rent hikes.

Renting vs. Buying, Bottomline

Both renting and purchasing a home come with certain financial benefits, but each option has some drawbacks. To give one illustration, even though renting a home is significantly less expensive than owning one, your freedom in the former situation is considerably lower, which can be a source of frustration. When you lease a property, you agree to abide by the rules set forth by the landlord, which may include restrictions on the types of animals you are permitted to keep in the home or the types of decorations you are allowed to use. As a result, you will have less leeway to decorate your space in a way that reflects your personal preferences. 

In the meantime, it is true that if you own a house, you will have more freedom regarding the decisions that you make, or that owning a home is an excellent long-term investment because you can own fully own the house once it is paid off in full, but for the time being, purchasing a house can put a considerable strain on your finances, especially if you are just starting out in life. This is especially the case for individuals who are just beginning their lives. In addition to the monthly payment that you make toward your mortgage, you will also be responsible for making payments toward other costs, such as those associated with maintenance, insurance, and property tax.