The Experts at Own It Home Loans Provide the Pros and Cons of Renting vs. Buying a Home

A common topic for those contemplating their future, to either rent or buy a home ultimately depends on your needs, finances and long-term goals. If you're currently grappling with this choice, or know it could come up further down the road, these pros and cons from Intercontinental Capital Group can help guide you to your best fit.

Renting a home


Pro: Convenience
Having the flexibility to move relatively quickly, not having to worry about maintenance, as well as having access to amenities can put you at ease. Of course, the fine details about your rental are hashed out with a landlord, but a major attribute to this option is the convenience it provides.
Con: Instability
With the proper amount of prior notice, any landlord has the right to evict tenants and raise the cost of rent. It's best not to get too comfortable in a rented property or invest much into its appearance, as it can be unpredictable living situation.
Pro: Lower insurance costs
Renter's insurance exists at a much lower cost than a homeowner's insurance policy, according to Investopedia. This can average $12-$20 per month, while homeowners may be paying $25-$80 per month.
Con: Not building equity
You can choose to rent a property for your entire life, but even if your payments amount to more than the properties worth, you have no equity in the home. You cannot sell it or pass it onto future generations.
Pro: No real estate taxes
By renting, you avoid a lot of upfront costs and taxes that are a reality for home buyers. This can include property taxes and real estate fees. Some other extras, like maintenance, might not be an explicit expense, but are most likely incorporated in your rental fee.
Con: No tax benefits
There's no federal tax deduction for monthly rent, but TaxSlayer recommends deducting other payments on your state tax return. Of course, this depends on where you live and what taxes you may be paying as a renter.

Buying a home

Pro: Long-term investment
If you play your cards right, you can be getting a return on your investment when it comes time to sell. As you pay off your mortgage, you gain equity in your home. Making renovations and generally taking good care of your house can help you sell it for more in the future.
Con: Upfront expenses
A hefty downpayment, real estate expenses and homeowner's insurance are just a few of the upfront expenses you need to prepare for if you want to buy a home. For some, these costs outweigh the equity they will receive from their investment.
Pro: Stability
If you buy a home, it's yours as long as you make your mortgage payments on time. There's also a clear path to ownership, and you can be assured your payments will remain the same and no landlord can evict you.
Con: Commitment
If you choose to buy a home, you're responsible for maintenance, upkeep and renovations. If you lead a busy life, as many of us do, these tasks can become overwhelming and costly. Try to deal with any problems, like leaky pipes or clogged gutters, before they snowball into a larger issue.
Pro: Customization
Your roof, your rules. You have free reign to paint, renovate and remove anything you desire as long as it doesn't compromise the structural integrity of the house. Keep in mind that not all renovations add value and Forbes cautions that too many custom renovations can make your home a hard-sell if you need to move in the future.
Con: Utilities
Yes, renters will most likely deal with utility costs as well, but not at the level of homeowners do. Depending on the size of your home, electricity, HVAC and water bills can be staggering. Always factor these recurring costs into your budget.

So, what's best for you?

Space, commitment and taxes are all individualized factors that will affect your decision to rent or buy a home, but for many, the deciding element is cost.

Unfortunately, there's no clear answer to if renting or buying is more cost-effective because it ultimately depends on your financial situation and location. Renting or buying in major cities is always more expensive than in the country, but one choice isn't always better than the other.

A good rule of thumb to go by from NerdWallet, is that if you plan to stay in a home for under three years it's probably beneficial to rent. Of course, home prices and downpayment could also change how financially appealing each choice is.

Making a house into a home

If you're ready to put down some roots, buying is the most practical option that aligns with your goals. Careful planning and budgeting should be done before making this large financial decision.

Make sure that you have enough saved up for the upfront expenses as well as a steady income so you will be able to make your monthly mortgage payments. If you need to take out a personal loan, remember InterContinental Capital Group's 3 C's: Credit, capacity and collateral.

If you've already found a house you love, don't let roadblocks get in the way of acquiring a loan. The unique underwriting approach by Own It can help you move in quickly and may help you qualify for more financing than traditional lenders.

Our ambitious and eager workforce at ICG and Own It are dedicated to finding clients the custom fit home financing to suit their needs. We understand that the homebuying process is unique to the individual, and we will pair you with a mortgage specialist who is licensed in your state and knows the ins and outs of local policies.

Don't hesitate to contact an ICG representative today to learn more about our fixed rate and adjustable rate programs that can help make your dreams a reality. Or if you're ready to begin the process, receive a home loan quickly and painlessly with Own It.

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