You may be thinking about moving. Should you rent a 1 bedroom apartment in Ridgeland, SC or buy a home. The question remains: rent or buy? Here are 10 points to help you decide.
1. When you prepare to buy a home, you will need a lump sum for a down payment, usually 20%. As a renter you may need to pay a security deposit equivalent to several months’ rent up front, perhaps more if you have a pet.
2. Mortgage interest and property tax are income tax deductible for homebuyers. Renters don’t have to pay these expenses in the first place.
3. Homeowners’ insurance is mandatory if you take out a mortgage. Renters’ insurance is optional, though advisable.
4. As the owner of a private house, you will generally be responsible for all maintenance, home remodeling, landscaping, and repairs.Some of these tasks may be taken care of for you if you own a condo, townhome, or house governed by a HOA, but you will be responsible for monthly or annual community living fees. These charges, which can be quite steep, are payable even if you no longer occupy the property — for instance, while you are trying to sell it. On the other hand, if you’re renting, your only regular charge will be the rent and perhaps utility bills. No home maintenance is required as a renter.
5. If you purchase or sell a property, you will need to pay closing costs. As a renter, you won’t pay these fees.
6. As a homeowner, you will build equity (if you are lucky). This is not guaranteed, however, especially if you’ve bought a townhome or condominium. In addition, you will need to consider potential earnings if you do not buy but invest your money elsewhere. If you’re a renter, your cash is available for other investments.
7. Owning a home means that a large portion of your money is tied up. When you rent, the bulk of your cash remains more liquid.
8. Buying a place to live gives you a sense of stability and rootedness in a community, which can be especially important if you have children. However, renting allows for greater flexibility to come and go as you please … particularly if it turns out you’re not happy in the area or job you’ve chosen, or the makeup of the neighborhood changes.
9. As a homeowner, you will have a fair amount of freedom in repainting or remodeling your house. When you rent, this type of option is much more limited.
10. If you purchase a private house, you will usually have greater privacy and quiet. When you’re a renter you will see more people more regularly.
The Destin Log