When weighing out the costs of buying or renting a home, there are many factors beyond the actual mortgage payment that have to be considered. Almost everyone discovers a few surprises involved with home ownership that they didn’t expect, which may make renting a home a better option. Here are a few key considerations.
Cost of Utilities
The cost of utilities is one of the first things to consider, especially if you’re moving from an apartment into a home. You may be excited about the additional space, however that space requires more utility use. Also, do you know how well the windows and insulation keep up in the winter and summer months? Remember, your neighbors are no longer sharing in the heating and cooling costs of your new living space.
Note: Renters are responsible for utilities.
Yard Work Required with Owning
Owning a home often means owning a yard. Many homeowners take care of this themselves, but this does require the investment of time and machinery. It’s always an option to hire a company to handle the yard work for you, but this is another financial responsibility. The normal yard maintenance may become pretty routine, but there are also bigger things to consider like trimming tree branches, and even tree and bush removal. These month to month expenses need to be accounted for in your budget plan when considering to rent or buy.
Note: Renters are responsible for yard maintenance.
The Possibilities
Often when selling homes, a broker may use the word “potential”. If the home you can afford has a lot of potential (a.k.a. work that needs to be done) to make it into the home of your dreams, keep in mind that every improvement costs that much more money and time. Even if you can “do-it-yourself”. Additional enhancements when purchasing a home require money for material, money to change, paint, in addition to the time involved when you are performing your own home improvements. If you hire a professional to help your home reach its potential, the cost of the contractor will need to be considered.
Keeping Up the Home Maintenance
After a person has purchased the perfect dream home, or fixed it up to be one, it still costs money to keep it that way. Upkeep is a major part of the home ownership budget. When purchasing a home, you might need to invest in appliances you’ve never thought about. If you are renting, the majority of these appliances are provided by the landlord.
There are other upkeep issues, as well, like walls that need to be painted, vents that need to be blown out, and carpets that need to be cleaned. Even design trends affect the value of your home. If your home has an outdated appearance, its value will drop unless you are willing to spend the money to update it. Don’t forget, there are also emergencies such as burst pipes or severe mold growth that may take you by surprise. Unfortunately, not all these issues are covered by homeowner’s insurance.
Note: Renters are responsible for carpets.
Exterior Maintenance
Keeping your house in good condition occasionally requires large investments like a new roof, windows, or siding. Prolonged life in the elements takes its toll on the exterior of your home, and putting off necessary repairs can lead to bigger problems and higher expenses down the road.
The value of your savings account, and willingness to spend savings on the emergencies and upkeep of a home is critical to consider when deciding whether renting or owning a home is a better option.
Rent or Buy: Is it Right for You?
Ultimately, the only right decision is what’s right for you. Deciding whether to rent or buy is a personal decision that needs to fit your lifestyle and your budget. Renting a home is the better option if you’re too busy working to worry about all that home ownership involves. At Gizzy, LLC we realize that owning a home is a large investment. We recommend making sure you are truly ready to commit to the home, neighborhood and responsibility. If you’re tired of the upkeep, and are ready to let someone else worry about the details, contact us at Gizzy, LLC today at (402) 915-0875 to view any of our available rental properties.