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Rent vs. Buy
The Pelham Group
Which side are you on?
Life is full of hard questions: Paper vs. Plastic. Coke vs. Pepsi. Apple vs. Android. The Lannisters vs. The Starks (Maybe not this last one...)
As far as heavily debated topics are concerned, you can throw in Rent vs. Buy. With the battles line drawn, let's step into the octagon and see if we can crown a champion!
Reasons to Buy 💰
1) Longevity
Putting down roots? If you plan to set up shop for the long run in a particular area, buying a house is definitely something worth exploring. The initial costs such as a down payment will be recouped over time.
In the long run, you will actually OWN the home after you’ve paid off your mortgage. Then you just have the property taxes and insurance which is undeniably much cheaper than rent!
2) More "Fixed Costs"
Landlord ever jacked up your rent $200 a month? Not fun. Of course, property taxes do fluctuate both up and down over time. However, a fixed rate mortgage of 15 or 30 years looks stable compared to a fluctuating rental market.
3) Freedom
Making a house your home is a lot easier when you call the shots. Want to install something that involves more than a hammer and a nail? Not having to ask permission from a landlord gives you the power to do what your please.
There is also the sense of pride in ownership, which still holds true today. According to recent survey by NerdWallet, 75% of Americans said that owning a home was a goal of theirs in 2018.
Reasons to Rent 💰
1) Maintenance
Of course when faced with a leaky faucet or a flooding issue, the renter isn’t going to be swiping his card at the local Home Depot or Googling a local plumber. Renters know that it won’t be their wallet hit by the unexpected up-keep of the property.
2) Short term flexibility
Moving to Europe in the next 2 years? Rushing to buy a house may not be on the top of your list. When your rental lease is up, it’s up. Packing up your stuff and getting a U-Haul needs to be done for renters and buyers. As a renter, you can quickly kiss that place you called home goodbye. As a homeowner, you would not have as much ease in changing locations.
3) Lower expectations
How “perfect” does your furniture need to look in your rental unit? How much is that outdated kitchen bothering you? If you are the homeowner, the answer is likely going to be more so. Renters can “deal with” their imperfections better because after all its not there place. Renter's don't suffer from the keeping up with the Jones's mindset.
And the Winner is......
It's a draw!
Looking for a more decisive outcome of what makes sense for your situation?