Renting vs. Buying in California
Which one is better: buying a home or renting one? This is a question that many people ask themselves. In our heads, we all have images about our dream home, but we also hear great stories about people renting their dream home and living care-free, without worrying about mortgage rates. Then we also hear stories about people who have lost their homes because they could not pay their monthly installments, complicating the answer to the original question even further.
In what follows, we would like to present a few arguments in favor of both kinds of homes, in an attempt to help you think and decide what would work best for the life situation you are in and what would be more compatible with your future plans.
Investing in Your Own House
Property investment used to be considered the best way to spend your money. Even though the housing market has been recovering for some time now, the value of property is far from being what it used to be. However, there are considerable advantages of being a homeowner:
- If you have a home with a fixed rate mortgage, you can know in advance how much you will have to pay each month until the end of the mortgage period – there won’t be any rent rises that affect you.
- Also don’t forget that as you make your house payment, it will continue to go down, as your value inevitably continues to go up
- One of my favorite aspects of having a mortgage is your mortgage interest deduction that you get to take on your taxes! It can be a HUGE reward for homeownership!
- Owning a home is a part of your financial future. Instead of paying rent with no return other than a place to stay, paying a mortgage brings a huge return in the long run and can set you up for financial freedom in years to come.
The emotional satisfaction of ownership – in your own home, you can do whatever you want. You can remodel the rooms, paint the doors or the walls, and do as you please. The ownership over property also offers security and a sense of accomplishment.
Renting a Home
Living in a rented property also comes with advantages:
- Mobility – as a tenant, you can decide to move to another location any time you want. You only need to wait until the lease period expires or you can renegotiate the terms of the lease with the property owner. If you are a homeowner, it can take strategy and time to sell it if you choose to move.
- Lower costs – with a rented home, you don’t have to worry about taxes, insurance fees and maintenance costs. All you need to pay is your monthly rent – the rest is the landlord’s problem.
- Flexibility – if you choose to rent a home and you suffer some kind of financial loss, you can easily choose to move to a cheaper home. If you own your home, this flexibility is not given. If you own your property, you need to cover all the related expenses, you simply cannot leave bills unpaid and you cannot reduce your costs significantly either.
If you need more details to help you decide, contact a financial expert. If you live in or around San Diego, CA, one of the best specialists in mortgages and housing-related financial questions is Maureen Martin. Maureen can help you choose the best housing solution to suit your way of life and your financial situation as well.