One of the most difficult questions people face at some point in their life is should I continue to rent or is it time to buy? Or in other cases, is it time to leave the nest and venture out on my own but what makes the most sense? I’m sure you’ve heard/readdifferent responses when trying to find an answer to this question. I wish I could say there was some kind of perfect formula like E=MC2 but it really comes down to what makes sense for you at that time. However I can at least advise what factors to take into consideration when trying to figure it out.
Renting can be great based on the fact it’s low stress factor unlike homeownership. For instance if something breaks, it’s your landlord’s responsibility to handle and finance the upkeep of the apartment- not yours. As a homeowner these repairs, whatever they may be, now become your expense and responsibility to take care of. Repairs can be expensive and timely depending on how big the problem. In a rental you don’t have to plan ahead for repairs, whereas in home ownership you must always be prepared for something to go wrong at any time.
Another positive of renting is you’re typically only locked into a place for a year (sometimes longer/shorter depending on the contract you and your landlord signed). For those who don’t know where their career paths or life are going to take them, it makes sense to not be tied down to a place. It is much easier to terminate a lease (if need be) than to sell and close on a property. Even in Boston where real estate seems to sell at the snap of your fingers, the process isn’t instant.
Also, you don’t necessarily know what you’re getting into when you first move into a place. There are many factors which affect your quality of living than just the place itself, such as your neighbors. Maybe you live in an older building with hardwood floors and above you are a couple of gals who love their stilettos. For those of you who haven’t lived under the combination of hardwood floors and people who wear heels, it tends to be extremely loud and annoying. A renter only has to deal with this for the term of the lease and can choose to move somewhere else once it has terminated. However a homeowner doesn’t have the option to just leave. Obviously they can talk to their neighbors who will hopefully be understanding and limit walking around – but you get my point.
It seems as if there are many negatives for homeowners but there are also many pros for buying as well. For one, you can make your home your own. In a rental you are limited to how much you can change about the space. Some landlords may let you paint and hang pictures but most likely not going to let you change much else. As a homeowner, you have the opportunity to put in whatever countertops, floors, etc. You can even paint your walls black (without permission) if you really wanted to (actually I’m a huge fan of chalkboard paint, huge hit with kids because seriously who doesn’t want to draw on the walls?)
Another positive of home ownership is the tax break (I know the words positive and tax in the same sentence..crazy!). Homeowners receive atax break each year simply for owning their home. Let’s say you rented out a place and then decided to buy it. Even if you were paying the same amount in rent as your mortgage, as a renter you do not receive any type of tax break. Which contributes to why many renters feel they are ’throwing money away’ when they write their rent check each month. Especially in Boston, where rent rates are astronomical and continue to rise, many renters would much rather put the money towards a mortgage which can turn into a potential investment down the road.
As you can see, there are several pros and cons with renting vs. buying. Not everyone is fiscally able to afford the substantial down payment associated with buying a house but if you are you may want to ask yourself: is it the right time to buy? Like I said before, there isn’t a perfect formula to help one decide whether to rent or buy but there are several factors to consider while making the decision.