Renting Versus Buying a Home
For many in the United States, homeownership is part of the “American Dream”, a subjective notion. Financially, this does not always make sense. This paper looks at the advantages and disadvantages of renting versus owning a home and explores the importance of performing a title search before entering into a purchase and sale agreement to buy a home.
Advantages of Renting
Career choices, family structure, health, and age drive personal financial planning. These same factors influence whether renting offers an advantage over homeownership. Macroeconomic factors are also at play as local housing and rental markets react to the economic climate where one chooses to live. A principle advantage of renting are situations …show more content…
A historical argument is that paying rent does not grow equity or store value like a mortgage payment. In the U.S., mortgage interest is tax deductible, which is away for those in higher income brackets to lower their taxable income. Renting does not provide this tax break. To some degree, renters are under the control of their landlords in so much as major renovations to a rental property are typically not permitted by tenants. Some rentals do not allow pets, and unless the property is rent-controlled, the landlord can substantially raise monthly rental fees at the end of a lease term or decide not to renew the lease at all (Siegel & Yacht, …show more content…
From a cost comparison, CNBC recently reported that U.S. “homeowners in all 50 states and Washington, D.C., pay from 33% to 93% more for housing each month than do renters living in the same state” (Starbuck & Tonovich, 2017, para. 1). That said, this author would certainly choose to buy is it were financially possible for him to do so.
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References
Brinklow, A. (2017. June 7). San Francisco median home price up to $1.5 million, says report. Retrieved on July 17, 2017 from https://sf.curbed.com/2017/6/7/15758460/median-home-price-sf
Martucci, B. (n.d.). Renting vs. buying a house – How to make a decision, pros & cons. MoneyCrashers.com website. Retrieved on July 17, 2017 from http://www.moneycrashers.com/rent-or-buy-a-house/
Siegel, R., & Yacht, C. (2009). Personal finance. Washington, DC: Flat World Knowledge, Inc. Retrieved from https://www.saylor.org/site/textbooks/Personal%20Finance.pdf
Western Title & Escrow. (n.d.). What is title and escrow? Retrieved on July 17, 2017 from
For many in the United States, homeownership is part of the “American Dream”, a subjective notion. Financially, this does not always make sense. This paper looks at the advantages and disadvantages of renting versus owning a home and explores the importance of performing a title search before entering into a purchase and sale agreement to buy a home.
Advantages of Renting
Career choices, family structure, health, and age drive personal financial planning. These same factors influence whether renting offers an advantage over homeownership. Macroeconomic factors are also at play as local housing and rental markets react to the economic climate where one chooses to live. A principle advantage of renting are situations …show more content…
A historical argument is that paying rent does not grow equity or store value like a mortgage payment. In the U.S., mortgage interest is tax deductible, which is away for those in higher income brackets to lower their taxable income. Renting does not provide this tax break. To some degree, renters are under the control of their landlords in so much as major renovations to a rental property are typically not permitted by tenants. Some rentals do not allow pets, and unless the property is rent-controlled, the landlord can substantially raise monthly rental fees at the end of a lease term or decide not to renew the lease at all (Siegel & Yacht, …show more content…
From a cost comparison, CNBC recently reported that U.S. “homeowners in all 50 states and Washington, D.C., pay from 33% to 93% more for housing each month than do renters living in the same state” (Starbuck & Tonovich, 2017, para. 1). That said, this author would certainly choose to buy is it were financially possible for him to do so.
(641 Words)
References
Brinklow, A. (2017. June 7). San Francisco median home price up to $1.5 million, says report. Retrieved on July 17, 2017 from https://sf.curbed.com/2017/6/7/15758460/median-home-price-sf
Martucci, B. (n.d.). Renting vs. buying a house – How to make a decision, pros & cons. MoneyCrashers.com website. Retrieved on July 17, 2017 from http://www.moneycrashers.com/rent-or-buy-a-house/
Siegel, R., & Yacht, C. (2009). Personal finance. Washington, DC: Flat World Knowledge, Inc. Retrieved from https://www.saylor.org/site/textbooks/Personal%20Finance.pdf
Western Title & Escrow. (n.d.). What is title and escrow? Retrieved on July 17, 2017 from