Renting vs. Buying a Home
Moving is not only deciding where to live, it also involves making the decision about whether to rent or to buy your next home. Many young people begin their lives renting since there are so many upfront costs associated with purchasing a home. Ironically, many homeowners nearing retirement sell their homes and downsize, becoming renters once again.
U.S. home ownership rates have fluctuated between 62% and 70%. Baby boomers downsizing, elevated prices in high-population housing markets, and high student debt preventing younger buyers from making down payments, all contribute to the declining homeownership rates.
Costs of Renting a Home
- Upfront costs – security deposit, first month’s rent, nonrefundable deposits, last month’s rent, utility deposits.
- Recurring costs – monthly rent, renters insurance, utilities.
Costs of Buying a Home
- Upfront costs – appraisal fees, survey fees, lender fees, title insurance, settlement costs, utility deposits.
- Recurring costs – mortgage payments, property taxes, homeowners insurance, HOA fees, mortgage insurance, utilities.
Advantages of Buying a Home
- Building equity over time.
- Homestead protection from creditors.
- Federal tax deductions.
- Potential for rental income.
- More creative potential.
- Sense of community.
Disadvantages of Buying a Home
- Potential for financial loss.
- Responsibility for maintenance and repairs.
- Most homes are not sold furnished
- High upfront costs.
Advantages of Leasing a Home
- No maintenance or repairs.
- It is easier to relocate by simply not renewing.
- You do not have to worry about how the real estate market is faring.
- The credit requirements are not as strict.
- Utilities may be included.
Disadvantages of Leasing
- No federal tax benefits.
- Limited control over housing costs.
- No equity building.
- Limited housing security.
Final Decision
The New York Times has a handy calculator that weighs the known financial costs associated with renting and buying. This calculator can help you decide what makes the most financial sense, but you must make the final decision.
Richard S. Weinstein
Richard S. Weinstein is the real estate attorney you want to hire to help you with the home buying process. He is an experienced attorney who can help with any stage of the real estate process whether you are renting or buying a home.
`With over 50 years of experience as an attorney, Richard S. Weinstein assists clients with the important financial situations in their lives. Whether you are dealing with bankruptcy, real estate (both commercial and residential, including short sales, foreclosures, and title insurance), estate planning, probate, business formations, or sales or mergers, Richard S. Weinstein is the attorney with the education, experience, and knowledge you need!
Call us at (561) 745-3040 or visit his website at rweinsteinlaw.com.
Law Office of Richard S. Weinstein, P.A.
250 S. Central Blvd. #101
Jupiter, FL 33458
Phone: (561) 745-3040
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