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Taking the Plunge: To Rent or To Buy?

By Mary Lamphere

If you're already weighing the options of buying versus renting a home, considering the benefits of each and the potential disadvantages of each can help you to make a sound decision. Whether you decide to rent or to buy all depends on the individual circumstances surrounding your needs and your lifestyle as well as various outside or environmental factors. There are advantages and disadvantages to both renting a home and to buying which should be considered before you make a final decision that's going to work for you.

Advantages of Renting

  • Renting does not require average to excellent credit.
  • Renting does not require a substantial down payment.
  • Renting allows for greater flexibility when it comes to moving.
  • Renting eliminates responsibility, placing repair costs and upkeep in the hands of the owner.

Advantages of Buying

  • Buying means the home is yours to do what you want with.
  • Buying provides you with equity which can be borrowed against.
  • Buying has certain tax benefits such as mortgage interest deductions.
  • Buying is like saving money because every payment that is made increases equity in the home.

Disadvantages of Renting

  • Renting limits the tenant to what they can do to the home such as paint, upgrades or changes.
  • Renting means that the tenant has little say over whether he or she continues to live in a home once the annual lease or contract dates expire.
  • Renting has no tax benefits.
  • At the end of a rental term, the tenant owns nothing and has no part in the property that was paid for.

Disadvantages of Buying

  • Buying requires more work as the homeowner is responsible for repairs and upkeep.
  • Buying is more costly and requires a substantial down payment as well as payment for all major or minor repairs.
  • Buying is long-term and before the homeowner can move he or she may have to first sell the home which can be challenging depending on the market.

Depending on your individual circumstances, the benefits of either, buying or renting, could outweigh the disadvantages. Ultimately, your decision should be based on factors that pertain to you and your individual desires as well as what matters most to you.

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