If you are at the stage of your life where you are planning to move out of your mom and dads and get your own place, you might be wondering whether you should rent somewhere or try to get onto the property ladder tight away. According to the good people at Exit Real Estate Consultants (https://www.exitrealestatela.com/), there are pros and cons to both leasing and buying. They say that if you really want to buy a home, you may want to consider a short-term rental initially to see how you manage living by yourself and paying for bills, etc. However, there are those who think that renting is ‘dead’ money and that the sooner you can get on the property ladder the better. Below are some of the pros and cons of renting and leasing.
Pros and Cons of Leasing a Home
There are several benefits to leasing a home, including the fact that you do not have to make a long-term commitment. You only need to live there for the duration of the contract you signed (you may even get to leave earlier if your landlord agrees). This is great for those who are not sure about what they want going forward. Leasing means you are not setting down firm roots in one place.
When you lease a home, you don’t have to take care of the maintenance or repairs of the property, as this is the landlord’s job. Furthermore, you are not responsible for things such as property tax or structural insurance.
Nevertheless, leasing does have its downsides too. For example, you cannot normally make the house your own. You will likely need to get permission for any changes you want to make. And any money you do spend on the house will be to the benefit of the landlord and not you. Perhaps the biggest disadvantage with renting a home is the fact that your rent price is not guaranteed to stay the same. Your landlord can raise the price at the end of each contract, meaning you will have to pay more or move to another property, all of which can be a hassle.
Pros and Cons of Owning a Home
Owning a home means you will have an investment for the future. Although it can happen that house prices drop, historically they have risen over time. And as you pay your mortgage, you will be chipping away at the amount you borrowed, increasing your equity all the time.
Paying a mortgage can do wonders for your credit score, giving you access to favorable interest rates should you need to borrow more money in the future. In addition, you will be eligible for tax benefits such as mortgage interest relief.
Owning a home means you are free to make as many changes and upgrades as you wish. You do not need to get permission from anyone for any improvements you make to the interior of your house.
As with leasing, there are some disadvantages to owning a property too. For example, you will need a large lump sum for a down payment. There will be other fees associated with buying as well, such as closing fees, etc.
In terms of the upkeep of the property, it is all the responsibility of the owner as are ongoing costs such as structural insurance and property tax.
Whether you rent or lease is really a matter of personal preference and will be determined by your circumstances. Deciding to settle down in one place and your access to cash will both be major factors in your choice.