ALBANY, GA (WALB) - Choosing to rent or buy a home is a major life decision. It doesn't just affect how much money you can spend, but also how much you can save.
Consider these differences to figure out whether renting or owning is best for you.
Home ownership can offer stability, investment opportunities, and other financial benefits.
But selling a home can be tough depending on the housing market, and you could face significant transaction costs. According to Investopedia, real estate is an illiquid asset, one that cannot easily be sold or exchanged for cash without a substantial loss in value.
Renting means you have the flexibility to move without penalty when your lease ends, but if your landlord sells your property, you could be forced to move without warning and without your security deposit!
Most renters have a base price for how much they will spend on housing each month. But there still could be unpredictable rent increases each time your lease is up for renewal.
When you own, you might pay nothing more than your mortgage and regular bills one month. But you may have to pay for home repairs the next.
Expenses that could pop up:
- property taxes
- trash pickup
- water and sewer service
- repairs and maintenance
- pest control
- tree trimming
- homeowners insurance
- pool cleaning (if you have one)
- lender-required flood insurance, in some areas
- earthquake insurance, in some areas
Most landlords or property managers handle maintenance but those who rent condos or houses may have to foot the bill based on their rental agreement.
According to the Apartment Guide Blog, most landlords require the following from renters: an application, proof of income, references from past landlords or employer, a credit and background check, a security deposit and some cities even require first and last month's rent.
Future homeowners may have some of those same requirements, but will also need a higher credit score to get the best interest rate on a mortgage loan, and a significant amount of money saved up for a down payment and closing costs.