If there is one question we get all the time from our clients, it’s this: is it better to buy a house vs rent an apartment?
Sometimes the answer is, “it depends.” Once in a while, renting can be the best option for you and your family. But 9 times out of 10, if you’re evaluating the pros and cons of whether to buy a house vs rent an apartment, the answer is BUY A HOUSE!
I’m a real estate agent, so that might sound like a biased answer. But one things I truly care about is the well-being of my community and my clients. I LOVE helping people find their home.
Whether it’s a first time home, a fun little flipping project, or an upgrade to that “forever home” where you want to raise your family, I just love seeing my clients reach their goals of homeownership.
But my recommendation to buy a house vs rent an apartment is based on a lot more than just my warm fuzzy feelings when I see a family get handed the keys to their new place. It’s based on years of investing, buying and selling properties, and assisting others to experience the serious benefits of home ownership.
Here’s why it’s probably to your benefit to buy a house vs rent an apartment.
1. Buying A House Offers You Freedom & Flexibility Ok, this one is a lot about the warm fuzzy feelings. When you own your own house, you have unlimited freedom to customize your space. You have the ability to make your house a HOME, not just a place where you live.
You get the freedom to change your space as much as you like in order to make it a reflection of who you are as a person. And you have the flexibility to do it on your own time frame and in your own budget.
You can also take pride in the accomplishment of being a homeowner, which is an amazing feeling. A major factor in the “buy a house vs rent an apartment” debate is the sense of accomplishment and fulfillment you experience when you get to sign your name to the deed on your very own property.
2. Buying A House Helps Build EquityOne of the key investment tips I always tell my buyers is to consider the cost of your mortgage payment against the average market value of a comparable rental property. If the rent you could gain off your home is greater than the mortgage payment, it’s a solid investment.
Firstly, this guarantees that you’re saving money every month since you’re not paying rental prices which are at an all-time high in 2022.
Secondly, if you’re ever ready to upgrade your home, or maybe you hit on difficult times and can’t afford your mortgage temporarily, you can always use the home as a rental and a passive form of income. You keep the home and continue building equity while a renter keeps up your mortgage payments for you!
The longer you pay the mortgage on your property, the more equity you build in your home. This adds to your overall net worth over time. The purchase of a home right now could set you up for better and larger investments in the future.
3. Buying A House Has Huge Tax Benefits There are lots of tax benefits for someone who chose to buy a house vs rent an apartment.
By itemizing your deductions on your income taxes, you can reap yearly tax benefits just for being a homeowner For instance, remember how we talked about comparing your mortgage to the comparable rent prices in your area?
Technically, the amount that you save by having a cheaper mortgage than rent is considered “imputed rental income.” This price difference is basically an income that you don’t have to declare on your income tax return.
You can also reduce your taxable income by itemizing and deducting your mortgage interest and your property tax payments. You may even qualify for greater tax deductions, such as home office expenses, necessary home improvements, certain kinds of home insurance, etc. Consult with a CPA or the IRS website to find out exactly which exemptions you could qualify for!
4. Buying A House Means No Surprises. We’ve all experienced it when we were renters: that envelope in the mailbox that you just know contains news you don’t want to hear. You open the letter tentatively, and there it is. Another notice that your rent is going up. Again. Your reward for being a long-standing, quality tenant is an increased payment every month.
The most important thing to remember when deciding to buy a house vs rent an apartment is that you know all the facts and figures of your home. With a fixed rate mortgage loan, you will ALWAYS know what to expect from your monthly housing payment.
And no one has control over that amount except for YOU!
Knowing your monthly rate will not fluctuate can help you better plan for your future. It can help you calculate a more accurate budget and create a long term financial plan for you and your family.
Not only is this hugely beneficial for financial planning, but it also creates an incredible peace of mind. There won’t be any more mystery envelopes from the landlord. You get to make the decisions that affect your family.
So, when is it a good time to rent?
I mentioned at the beginning of this blog post that there are some occasions when renting can be the better option for your family. I’m always a big proponent of buying a house when you can, but there are a couple scenarios when it’s a good idea to stay a renter for a little while.
Check back for the second part of this blog post, where I’ll outline three scenarios when renting might be the best option for you and your family!
Are you ready to stop renting and start owning? I can help! Feel free to contact me through my website, or give me a call or text at (541) 326-6596.
