Buying vs Renting a Home

The choice between renting and buying a home is a difficult one. While every case is different, the approach and consideration are pretty much standard. Demographically, millennials have been a renter group as compared to older generations. Millennials' attitudes, on the other hand, have shifted in the last year, as they have led the way in home purchases. Even so, millennial home ownership stands at 47.9%, far behind Gen X (69%), and baby boomers (77.8%). Purchasing a home is associated with achieving the American Dream, as well as a number of financial benefits and incentives; however, purchasing a home is not for everyone. However, as simple as it sounds, renting comes with a slew of costs and headaches. 

The biggest perk of renting is that it offers the freedom to move without any penalty when your lease ends. Even if you decide to move halfway through your lease, most landlords will be willing to settle if you give them enough notice and forgo your deposit. This freedom gives you the ability to look for job opportunities and therefore make more money when you find them in a different location. Other financial benefits of renting are predictable monthly expenses and not having to worry about repairs around your home.

Buying a home comes with a number of incentives. Most of them are financial, while some are intangible. Intangible benefits include a sense of stability and pride of ownership. The most compelling reason to buy a house is the equity you accumulate with each mortgage payment. Agreed, that this equity is small in the early years, where most of the payment goes towards the interest of the loan; however, as time goes on, the portion of payment that goes towards reducing your principal keeps getting higher. On top of that, if the housing market is trending upward, then this equity is compounded by the gain in your home's value. On the flip side, if the value of your home falls, then in the short term, your equity value could turn negative. Some of the financial benefits include property tax and mortgage tax deductions if you itemize your tax deductions.

The majority of first-time home buyers finance their purchase with a mortgage. A mortgage is a financial contract between a lender and the buyer of a home. A mortgage is simply a non-recourse loan backed by your home as collateral. Since the financial crisis of 2008, lending standards have become more stringent, and most mortgages require anywhere from a 10%–20% down payment for approval. Check out mortgage calculator at bankrate.com

✔️ You have sufficient savings to secure a mortgage.
✔️ Plan to stay in one location long term.
✔️ You are looking for stability.
✔️ Like to work around your property.
✔️ Build equity in your home.

✔️ You want freedom to move and relocate.
✔️ You are only planning to being in the home for a couple of years.
✔️ Predictable monthly expense.
✔️ Want someone else to take care of repairs around your house.
✔️ Do not have enough saving to make a down payment.
✔️ Build equity in your home.

Play with the mortgage calculator to see a mortgage can afford using your maximum monthly rent payment

Checkout our search tool to find MLS listed homes for sale or rent here. If you like Zerorets to represent you as your buyer agent, Zerorets will offer you a full buyer's agent commission rebate. Learn more about Zerorets full commission refund service.