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Renting Versus Buying: Which Choice is Right for You?

December 19, 2018

Your biggest monthly living expense is probably the rent or mortgage payment. Every month, when you write that rent check, do you wonder how long you’ll be repeating this process? Buying a home is a scary proposition for some people. They fear the long-term commitment to the property and the return on investment. As you’re pondering, renting versus buying, McGuinn Hybrid Homes offers these things to consider to determine which choice is right for you. When renting makes sense. For the short-term, renting can be a viable option, particularly when you’re just getting to know an area. You can take your time checking out towns and neighborhoods, looking at schools and commutes, and exploring the local amenities. If that’s your plan, look into tenant-at-will agreements, where you don’t need to sign a long-term lease, but can simply offer 30-day notice that you’re leaving. People who are in an uncertain situation—with employment or financial struggles, for example—may also opt for renting. Again, it should be viewed as a temporary solution, while you build up your buying strength. The value of buying a home. The biggest difference between buying a renting a home or apartment is in the equity. Rent is an expense. A mortgage is an investment. With every mortgage payment, you gain equity—getting closer to ownership. As your property value increases, so does your equity. With housing values on the rise, the return on your investment grows. If you had bought a home last year for $200,000, it could be worth $220,000 today, even if you made no upgrades whatsoever. As a renter, the equity goes in the landlord’s pocket. Buy a home. Get tax deductions. Homeownership comes with the benefit of deductions on your income tax return. Every year, you can deduct the mortgage interest, property tax, and mortgage insurance premiums. When you buy your home, you can claim the points you paid for closing costs. If you have a dedicated home office, you gain even more deductions as a homeowner. A portion of your mortgage, home insurance, and utilities is deductible for space that is used exclusively for business. Either choice is getting more expensive. Every year, you can expect your rent to go up. The landlord may call it a “cost of living” increase, even though the property’s mortgage has likely stayed the same. Your landlord is profiting from your decision to postpone buying a home. Wouldn’t you rather be in that position? The cost of homes and mortgages is going up, so the longer you wait to buy, the more it will cost you. As you put off making the decision, you’re missing out on the equity you could be reaping. The affordability of a new home is getting tighter, as the home you could buy now might be out of your reach in six months, with the rise in the home’s price and interest rate. Plus, if the rate actually drops, you can refinance. If you decide to move, you can become that landlord who makes a profit on someone else’s decision to rent. The best step to take when you’re uncertain is to contact an experienced lender. This professional can discuss the mortgage programs that are available to you now, so you can make an informed decision. With so many choices—including 100% financing or low down payments—you might be surprised at your buying power. Take a look at McGuinn Hybrid Homes’ communities of single-family homes and townhomes in Columbia, SC, and the surrounding cities and towns. Our energy-efficient features conserve energy, lower utility bills, and increase the resale value. In the month of December, McGuinn Hybrid Homes is offering special pricing and incentives on a selection of our move-in ready homes. Stop wasting your money. Get on the path to homeownership. Contact McGuinn Hybrid Homes to get started.  

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