There are a lot of questions out there now about renting or buying a home. If you are in the market for a home, what should you do?
The common opinion is that making a rent payment instead of a mortgage or purchasing is like “throwing the money in the wastebasket.” At some point in time before the recession, homes were incorrectly considered an investment that would “always” go up rather than one that “may” go up.
When you consider all the pros and cons, buying may not be the best choice in all situations.
Avoid big money commitments: Usually, one can rent for the same or less than the cost of buying and they don’t have to come up with large fees like closing costs or taxes. Also, if a mortgage is taken out, the first several years of payment are dedicated mostly to the interest, not the principal.
Many apartment communities cover the costs of maintenance, landscaping and general repairs that a buyer would be responsible for themselves. A renter’s biggest expenditures are often moving and furnishings.
Flexibility: Since renting requires no substantial long-term investment, the renter has choices more often about their living situation. Moving from a bought home involves planning and costs such as commissions to real estate brokers. Also, if a home buyer wanted to sell, they could be at the mercy of the markets or not be able to sell their home at a profit.
If house values continue to decline, the worst scenario for a renter is only paying until their lease expires. People who rent can’t place a value on having that freedom.
Investment Considerations: Large down payments or home purchases can make it difficult for home buyers to maintain savings and investments specified for retirement and related activities.
In some cases, the money saved by not buying could outweigh the money earned on a purchased home, depending on the investment and property appreciation. For a home buyer, the risk is higher if an unexpected sickness or injury occurs causing financial strain.
The rent vs. buy decision is more than comparing lease and mortgage payments. The reality is there are pluses and minuses to each option.
For more information on our online specials or renting an apartment in Lynchburg, VA, contact Walden Pond Apartments.
Original article – Bradenton.com