Tag: Which

Renting Vs. Homeownership: Which Is Better for YOU?

Hey! So is it better to rent, or is it betterto buy a home? That is the question that virtually everybody asks themselves at one point.

Well,guess what? We here at How To Adult have an answer for you, and that answer is.

It depends.

It depends on you.

It depends on things such as your desired lifestyle and your finances.

So here are a few things to consider to help you answer that question.

Part 1: Lifestyle.

So maybe you'll see yourselfreflected in some of these things.

Let's talk renter's lifestyle.

Renters tend to move aroundmore.

Renters are free to chase job opportunities in other cities or states.

They don't haveto spend their nights and weekends having to do maintenance work on their house or theirlawn, but they do tend to pay for that luxury in the form of, on average, higher monthlyhousing payments.

What about the homeowner's lifestyle? Well,homeowners tend to be more settled, like owning a house is typically thought of as puttingdown roots.

Transaction costs of buying and selling a home are high.

So it's not a goodidea to do it often.

In fact, the average house needs five years of appreciation toearn out the closing and selling costs.

At the same time, that stability can be reallynice for people with kids or with pets or people who need that sense of consistencyin their lives.

As long as they're not breaking any rules or laws, homeowners are free torenovate or upgrade their house, which is something that, in general, renters are notable to do.

So if you're someone that really likes to make a place your own, then, like,owning a home might be for you.

(P.

S.

Let me know in the comments, does anybodyelse watch Rehab Addict? I know it started in, like, 2009, but, guess what? I just startedwatching Modern Family.

I'm usually about five to six years behind the curve.

I'm notgoing to do an impression right now, but I could.

You better believe I could.

) On the other hand, if spending your weekendspainting a fence or whatever, if that sounds like torture to you, then you've got threeoptions.

One, hire that work out.

Two, just plan on continuing to rent.

Or three, becomeTom Sawyer, which is what I'm doing.

Part 2: Finances.

Renters typically have highermonthly housing payments, but they don't usually have any other out-of-pocket maintenance costs.

And some of those costs can get really big, really fast.

Really big, really fast.

Oncea renter signs a lease, their monthly payments are locked in, so you don't have to have,like, big emergency maintenance funds if you are a renter.

Homeowners, meanwhile, do enjoy that lowermonthly payment, but they still have to deal with getting a new roof every ten years anda new water heater every seven years, and etc.

Renters may enjoy a locked-in monthlyrent payment for the one or two years that their lease runs, but homeowners tend to havea locked-in monthly mortgage payment that doesn't change for thirty years.

So, think about that for one second.

Imagineif you could freeze your rent so that it never goes up for the next thirty years, and thenafter those thirty years of paying rent have passed, they go away forever, and you havethis thing that is worth a lot of money.

That is the life of the homeowner.

Now it is at this point in the conversationthat many renters will bring up property taxes, specifically how they don't have to pay them.

That's true, but the landlord isn't just going to eat the cost.

Renters do pay property tax,maintenance, landscaping, it's just that all of those costs are built in to your monthlyrent.

Also, homeowners can think of their principalpayments going towards the mortgage every month as a kind of forced savings.

While rentersonly get shelter in return for their monthly payments, homeowners get shelter and buildequity.

Down the line, this equity can be tapped in the form of a home equity loan orline of credit, or can be returned to the homeowner when they sell the house to downsizeor move.

This "forced savings" is what many people refer to when they say a home is agreat investment.

So is being a homeowner always the right financialdecision? Not necessarily.

They usually have to save up a large down payment and that ismoney that is tied up in the house rather than working for them in, say, the stock market.

That's arguably what's called an opportunity cost, and it is something to consider.

So again, is it better to rent or buy? Thatis a question that can only be answered by you and your unique situation.

I hope that some of the points in this videowill help you make your own housing choice.

And if you do choose to buy, we're going tobe doing a "How to Buy a House" video in the future.

If you have any questions or tips,please let us know in the comments section below.

We would love to hear from you! AndI will see you guys soon! I love you, bye! Mwah!.

Source: Youtube