Are Rising Home Prices Making Renting a Better Option?

Written by: Mike Valles

Things certainly are looking better for those who are selling a home. A seller can now get more than they could for their home in previous years, but this may also make it difficult for new buyers to make the step. For many, rising home prices may mean that renting a house is still the better option.

Buying a Home Costs Less than Renting

It has been true for a long time that it is cheaper to buy a house than to rent it. Not only that, but when you buy a house you also have something to show for it in the end. With equity built into it, it is an investment for the future – assuming you hold on to it.

The National Association of Realtors (Realtor.org) did a small survey and found that about half of the renters they talked to expected their rent to rise within the next year. This can leave it rather open-ended as to how high the rent will go over a period of several years. Of course, with home ownership, you always know how much your payment is going to be – at least if you have a fixed rate mortgage.

Advantages of Renting a House

If you are going to rent, the ideal way to go is to be on a month-to-month agreement. MoneyCrashers.com mentions this would be better especially if you are not yet settled into a career and may want to move quickly. Not having to sell the house before you can move will give you a greater degree of freedom.

Another advantage of renting is that you do not have to pay the cost of maintaining it. If the roof leaks or you have to fix the toilet, the expense usually is handled by the owner. The owner is also responsible for the insurance, too, although a renter would do well to get their own possessions covered because owner’s policies do not cover this.

Consider the Extra Costs

When you buy your own home, you have the extra expenses of maintaining the house and the property. This means you pay for the roofing, the painting, trimming or removing trees and brush, the windows, etc. Basically, the property continues to depreciate unless you pay to keep it looking good.

Longevity in Home Ownership Is Better

When you are thinking about the benefits of buying a home, it is important that you consider how long you are planning on living there. The costs of obtaining a mortgage means that you would need to live in the same home for a minimum of three to five years, says BusinessInsider.com. Less than this time means that you will not get a return on your investment. You also want to remember that you may not always be able to get the price you want for it later on. If you are not sure how long you might be staying, renting would be the better option.

Whether buying or renting is better for you only you can decide the answer to that question. Considering all the issues and benefits, as well as the disadvantages, will help you make an intelligent decision.


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