Owning Versus Renting: Advice By Bob Vogel
This Article On Owning Versus Renting Was Written By Bob Vogel
Owning vs. Renting
The age old question when wanting to become a first time homeowner, do I purchase my home or do I find a rental to suit my tastes. Having been on both sides of the argument in the past 2 years, I can speak from experience and give both pros and cons of each decision.
Owning Versus Renting: Owning
Pros: The main pro of owning your own home is having the ability to do whatever you want, whenever you want to do it, and how you want without getting permission by your landlord or property management company. This could mean painting your powder room that lovely shade of chartreuse you have always envisioned, planting 3 dozen rose bushes in your front lawn, having that EDM dance party at 2am, or constructing the Taj Mahal of swing sets for your little ones. Basically since you are making that mortgage payment, please feel free to treat your house however you’d like. Another benefit of owning your residence is the ability for tax deductions. If you itemize your deductions, you are able to count the interest paid on your mortgage as a deduction as well as the property tax. Another tax deduction can be had if you work from home and have a dedicated home office. For this space you can take an allocation of the mortgage and utilities as a deduction as well. As always, please check with a tax professional when claiming this deduction as it is under high scrutiny from the IRS.
Owning Versus Renting: Cons
Cons: Gone are the days of the unbelievable appreciation in real estate values as that bubble has long since burst. If you are looking at a home as a quick investment, I would strongly discourage this mentality and know that appreciation in value will probably follow inflation or slightly higher rates, but not the double digit increases of years past. Another downside to owning is the “you break it, you buy it” rule. If something like an appliance should break, it will be on you to make the necessary repairs and get the items back to working order. If not planned for properly, spending $4,000 on a new furnace and AC unit, might hit you pretty hard!
Owning Versus Renting: Pros And Cons
Pros: The ability to be selective and choose a location that is to your liking is a main positive of renting. After a year or two, if you don’t like where you are living, you can just pack up and move somewhere else. As your taste and desires change, you can change where you live. Another good reason to rent is it is favorable to individuals with bad credit. Most of the time your credit will be pulled prior to moving in, but as long as you have first month’s rent and security deposit, more than likely, you will get the place. In doing so, you can start putting together a history of recurring monthly payments which will assist you when looking to purchase a home in the future as it shows credit worthiness. A final reason is maintenance is normally included in your rental. Should an appliance or something with the home/apartment/condo fail, it is the owner’s responsibility to bring it back to working order in a timely fashion.
Cons: If you live in a location where the rent can fluctuate, you may not have control or the additional funds should your rent increase past your budget. In this case, you would minimal time to find a new place to go and move out. If renting a home you might be subject to the owner not wanting to renew your lease/rental agreement, or better yet, they may sell the home, ultimately leaving you homeless and with minimal time to move out. Another downside to renting is not having the freedom to decorate or make changes to the place you are living. I know from experience, my old landlord wanted to keep the walls in her townhouse tan, and if I were to change the color, I would need to paint it back prior to leaving. However, how was I going to do this if there wasn’t adequate paint left? I had to match the color exactly and it was up to me to get it back to normal.
In Conclusion On Owning Versus Renting By Bob Vogel
In closing, there are both pros and cons for each situation, and ultimately it is up to you how you wish to proceed. When my credit was less than stellar, renting really helped me out as I was able to show 2.5 years of monthly rent payments made on time. However, it came to that day where I wanted to be a homeowner again and that is where I am at today. Before you make a decision, make sure you do your research and ultimately do what is best for you!
About The Author: Bob Vogel
Bob Vogel is a senior writer for Gustan Cho Mortgage And Real Estate Information Center and a licensed mortgage banker for The Money Store . Bob Vogel has been a career accountant and has helped thousands of accounting clients in not just doing their income tax returns but has been a trusted advisor to all of his clients in areas of financial planning, investments, tax advice, and financing. Due to the complexity of the mortgage lending business, Bob Vogel has decided to get his national NMLS mortgage loan originator license and has passed his federal NMLS mortgage lending license on his first try while he was working full time as an accounting director at his present employer. The management and team of The Money Store is extremely proud and blessed to have a rising star like Bob Vogel become a member of one of the oldest and fastest growing national mortgage companies in the nation. Congratulations on you passing the NMLS national exam and welcome on board to The Money Store, Mr. Bob Vogel.