Renting_vs._Buying

The Disadvantages and Advantages of Renting vs. Buying In this paper, I will show the disadvantages and advantages of renting vs. buying. Ownership is an opportunity that many people dream of. However, sometimes that dream is not for everyone with today’s market. According to Birmingham- based Regions Bank’s chief economist says, Alabama economy is showing definite signs of improvement, but like most of the country remains mired in what he calls “a slow recovery”. Compared to owning a home, renting is much easier and may be less of a headache. Buying a home is a huge investment and not one to take lightly. All things should be considered when buying or renting. With buying all personal circumstances should come into play. People assume that buying is always to their advantage and to some people it can be. Some may not realize that there are disadvantages as well. Buying is a process that takes time and money. When you rent you do not have to have great credit or a lot of “up- front” money. The worries of not being able to make a mortgage payment do not come along with renting. Renting is not a permanent agreement. Renting gives an individual a sense of freedom to change their mind Some advantages of renting or buying are, there is generally little or not work in maintaining rental property. All major problems or issues are for the landlord to maintain. Rental properties are more fixed cost for the term of your lease. You can’t loose or gain equity on rental property. With rental property you have the option of relocating when your lease agreement is up. There are no real ties to renting property. With buying property over time mortgage balances decrease and equity builds up, if the value does not increase. You have the ability to make improvements to suit your needs and wants, if you own your property. There are also tax advantages that come with buying property. Some disadvantages of renting or buying are, no matter what happens with the value of the property, you will never gain equity in rental property. There are limited options to make changes to suit your needs on rental property. No tax advantages to renting. The owner of the rental property gets all tax breaks that are available. With buying property equity may go up or down or stay the same. In order to move from property that you own, you would have to sale your current property, if there is money left owed on the property. Larger down payments are required in some cases when buying property. When issues arise property owners are 100% responsible for any and all repairs.