Renting vs Buying A Home - Things to Consider

You may have doubts in the home buying process if you have rented a property for several years. We will explore the pros and cons of both buying and renting a home in this article to help you finally decide which path to take.

Long time home renters might feel uneasy about the idea of buying their own home. This is because buying a home is much more complicated than the renting process. Homebuyers are obliged to apply for home insurance, pay for monthly home maintenance costs, and settle real estate taxes and fees. It might seem daunting at first, but anyone can be more comfortable with the home buying process by knowing more about it.

Ask your realtor for information regarding all payments involving homes you are interested in. Ask about maintenance costs, average fess and taxes and organize all information in a spreadsheet. Organizing these data will give you a bird's eye view of the total and monthly costs you have to pay for. It is highly recommended that you use a digital spreadsheet so that you can easily compare different homes side by side.

Buying a home also means you are buying into your local community, according to writer Ilyce Glink, author of '100 Questions Every First-Time Home Buyer Should Ask'. Owning a home in a particular community may require you to pay for local taxes and other services that you do not have to pay if you are renting.

Next, you'll need to do some extensive research about tax benefits. Home ownership usually does give you several tax advantages over renting, but this will vary significantly depending on your current income and the total amount of real estate property tax you will be paying each year.

You can estimate your real estate tax benefit by taking into account all your other tax benefits, deductions and current income level. As always, it is better to consult with a financial advisor or an accountant to help you in doing this.

Owning a home is seen as a long-term action. Going through the whole home buying process is just not worth the time, effort and money if you only intend to settle in a particular location for a few months or a couple of years. If you're not yet decided on where to settle in for the long-term, it might be better for you to rent a home on a monthly or yearly basis.

If you don't want to settle in a specific neighborhood, then buying a home might not be for you. If you are seriously considering to buy a home, then you need to decide where to settle in and, if ever, when and where you want to relocate in the future.

About the Author: Alexandria P. Anderson is a Richfield real estate agent that helps people to find and purchase Richfield homes and properties in the Twin Cities of Minnesota.