According to the stats, it would appear that the millennial age group is in the prime years of their life for home ownership. Even so, less than 33 percent of the age group own their own homes. With many opting to rent instead of buy, you might be asking yourself which is the best decision. Rent vs buy? Surprisingly, there are benefits for both.
Should I Rent?
Full disclosure: I’m a renter. And besides not wanting to fork over the large chunk of cash to make a downpayment on a house, I simply don’t want one. I prefer apartment life over house life. And though I know I could purchase a condo, the condo fees on top of the regular mortgage fees and house maintenance costs turn me off of purchasing.
That said, I will admit that when you rent, your money essentially ends up in a bottomless pit. It’s not that you don’t get value from what you pay for monthly, but it’s that the long-term value doesn’t contribute to anything for you (except maybe your credit score).
If you’re a renter or thinking of becoming one, the median rent across America hovers somewhere around $1,050 per month. Though what you actually get for that $1,050 per month varies state-by-state, and depends highly on what you’re looking at (newer vs. older building, one vs. two bedroom, etc.).
Benefits of Renting
Renting is a great option if you’re planning on traveling or moving around. Whereas purchasing property is a long-term commitment, renting is usually in shorter increments of 6, 12 or 18 months. With that in mind, there are fewer financial risks but also less financial gain. Renting typically means less in maintenance costs, and you save money on homeowners insurance and property taxes.
Or Should I Buy?
Purchasing a home seems like the more adult thing to do. Plant some roots and build a home. And one of the major things to think about when it comes to deciding to purchase your house is that a house (or property in general) is an investment. Though that doesn’t mean it necessarily guarantees a good investment.
If you are thinking about purchasing a home, the median home price in America is $200,000. Though again what you get for that $200,000 varies state-by-state.
Benefits of Buying
If you are thinking about buying, there are definitely a few benefits. Buying might be a great option for people planning on staying in one place and building ties in your community. Being a homeowner also offers more privacy and autonomy than renting.
Homes also typically increase in value, allowing you to build equity. It can also mean more predictable and stable costs, especially if you’re on a fixed-rate mortgage, whereas rent tends to increase frequently. Finally, while you do have to pay interest and property taxes, they can be tax deductible.
Is renting or buying better? Tell me your thoughts below!
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Tae started out as a journalist before following the money into the corporate world. But it turns out that the grass isn’t always greener and now you can find her spending most of her time writing about all the things she loves. Namely, money, travel and business with a hefty dose of self-deprecating humor. She is a podcast fanatic, blogging aficionado and loves to find new ways to turn passions into cold hard cash!