Disadvantages Of Renting
No Equity Building
Unless you’re party to a rent-to-own agreement, every dollar you pay in rent is gone forever. No matter how long you remain in your rental unit or how exemplary a tenant you are, you can’t build equity in the property under a standard lease agreement. If you plan on staying in the same location for more than a few years, buying may be a smarter financial choice than renting.
No Federal Tax Benefits
While homeowners can deduct property taxes and mortgage interest on their federal income tax returns, renters aren’t eligible for any housing-related federal tax credits or deductions. Depending on your property tax and mortgage interest burden, this shortcoming can raise your federal tax liability by several hundred dollars per year.
Limited Control Over Ongoing Housing Costs
Unless you live in a municipality with rent control laws, your landlord has the ability to raise your rent once your current lease expires. Rental property owners raise rents to match rent increases elsewhere in the market, to compel current tenants to vacate the premises rather than sign a new lease, and for many other reasons.
If you maintain a good relationship with your landlord, you’re less likely to face onerous rent increases from year to year. No matter what you do, though, you can’t exercise complete control over your rent. By contrast, homeowners with fixed-rate mortgages make fixed loan payments each month, regardless of what the local real estate market does.
Limited Housing Security
While most jurisdictions have generous renter protection laws that prohibit landlords from evicting without cause and require adequate notice (typically 30 or 60 days) that tenants won’t be given an option to renew their leases, no law entitles you to remain in your rental unit indefinitely. Homeowners don’t face such uncertainty. They can remain in their homes as long as they stay current on their mortgage payments.
The New York Times has a handy calculator that weighs the known costs (both financial and time) associated with renting and buying. Although this calculator can help you decide what makes the most financial sense in a particular situation, it can’t help you evaluate all the subjective, non-financial factors that affect your ultimate decision. Only you and your loved ones can make the final choice, so as you work toward an ultimate decision, keep an open mind. Remember that it’s better to wait and make the right call than rush into a choice you come to regret.
Are you deciding whether to rent or buy your home? If you are interested in receiving information on homes that are currently on the market and ready to be purchased please visit my website at www.gina.ithinkrealty.com or email me at firstname.lastname@example.org
My name is Manny Quiros, I’m a real estate professional in the “Disney Area”, I have lived in this area since 1999 and have called this area my home and place my wife and I to raise our three wo....
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