Should You Continue Renting or Are You Ready to Buy?
While buying a home is likely your goal, it may not be in the cards for you at this time. If you're considering whether buying or renting is best for you, there are several factors you need to be considering. While Team Andy Gibson wants to help make your dream of buying a home at Lake of the Ozarks a reality, we also know that it may not be the right time. So this week, we're taking a look at the advantages and disadvantages of renting vs buying to help make your decision making easier:
Advantages of BuyingUnlike renters, homeowners build equity over time. Several tax benefits cater exclusively to homeowners, saving money every year just for owning. When you own, you're free to get creative with your home. You can paint walls, add new bathroom fixtures, update your kitchen, finish your basement, or build a patio or deck to your heart’s content. Since homeowners tend to stay in their homes for longer than renters, they’re more likely to put down roots in their communities. And when you're ready to move, your home can be used as a source of income by renting it out.
Disadvantages of BuyingThough upfront home buying costs can vary depending on many factors, you could spend well over 20% of the purchase price. As a homeowner, you’re responsible for covering the cost of all uninsured maintenance and repair work on your home. If home values in your area decrease or remain flat this may bring down the appraised value of your home and risk a financial loss when you sell.
Advantages of RentingAs a renter, you’re not responsible for home maintenance or repair costs. If a toilet backs up, a pipe bursts, or an appliance stops working, you don’t have to call an expensive repair person – you just have to call your landlord. Many rental properties also include the cost of some utilities in the monthly rent rate, especially in condo complexes at the Lake of the Ozarks. Although most landlords do require an application to be completed, and a credit and background check to be ran, these are typically less strict than a mortgage lender would be - making it easier to get approved. And when it's time to relocate it's easier, less time-consuming, and potentially less costly when renting.
Disadvantages of RentingUnless you are party to a rent-to-own agreement, the money you spend toward rent is gone. While homeowners can deduct property taxes and mortgage interest on their federal income tax returns, renters aren’t eligible for any housing-related federal tax credits or deductions. As a renter, you have limited control over ongoing housing costs, which means that your landlord could raise the rent rate on you at the end of your current lease. While you cannot be evicted without cause and must be given notice if the landlord doesn't wish to extend your lease, no law entitles you to remain in your rental unit indefinitely.
Does it Make Sense to Buy?Buying a home is a big commitment. Sit down and review the pros and cons of both options before pulling the trigger on a purchase. You also need to consider your future short-term and long term goals. While it may seem that buying is the best choice, if your future plans do not include staying in one place for very long, renting is a better option. Another thing to consider is the reason for wanting to buy. If you just want to buy so you don't have to worry about being restricted on the improvements you can make, but you don't plan to stay in the area for an extended period of time, it's in your best interest to tough out your frustrations and stick to renting until you can commit to settling down.
Are You Financially Ready?This is one of the biggest financial decisions you'll make in your life. There are many factors you need to take into consideration when thinking about buying. It may seem like putting your money towards a mortgage payment every month is a better investment than paying monthly rent toward something you don't own. However, when you decide to buy a home, you could be taking on a lot more financial responsibility than you can afford. Evaluate the relative costs, benefits, and drawbacks of owning versus renting your home. If you don't have the money for a down payment and additional costs of owning a home, renting is the best option.
With this helpful information, you'll be more easily able to determine whether buying or renting is the right choice for you. To discuss buying and renting options, contact Team Andy Gibson, the most trusted real estate team at the Lake of the Ozarks. We're experienced in real estate AND renting at the Lake of the Ozarks, and can help you to determine which option is best for you!
Keller Williams Lake of the Ozarks Realty
858 Hwy 42
Osage Beach, MO 65065