It’s the age old question of this or that. What came first, the chicken or the egg? Do I chose paper or plastic? Do I rent or buy a house? How do you determine what works best for you? Below are some factors to consider.

Renting a house allows you the freedom to move to other locations depending on your contractual obligations. However, renting a home does not guarantee you can stay as long as you would like. If the homeowners decide to sell or worse, foreclose, you’ll find yourself looking for a new place very quickly. Alternatively, buying a house is a huge financial commitment and once you’re in, moving to other locations is no longer an easy option. When you buy a house, provided you make your payments on time, you have a place to call your own for as long as you would like until you decide to sell.

Renting a house means that you’ll be making payments to a land lord. Often you’re limited with the alterations that you can make. Some landlords don’t allow painting, remodeling, additional house guests, or even pets. When you chose to buy a house, you are making payments directly to the bank or a private loan holder. You have the option to remodel at your leisure, provided you have HOA approval if necessary and you can have pets or guests if desired.

Renters sometimes find that their landlord will help with certain repair costs such as HOA fees, appliance replacements, and repairs. Often these repairs are done at no cost to the renter. Homebuyers however, are responsible for their own HOA fees, appliances, and home repair items. Homeowner’s insurance will cover most of these items, but are still at the cost of the homeowner.

Renters have the option to build their credit history by renting a home if they make payments on time, but are not building any equity. Also, a landlord has the right to raise rent prices at anytime. Homeowners build equity, and unless they have a variable interest rate or special contractual agreement, the mortgage should remain the same.

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This is filed under Rent Vs Buy.

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