Whether we should rent or buy a home is a consideration we all have to make at some point at least once. Independent of the market dynamics between metro areas, there are some generalities that can be made about each option and which makes the most sense for you. The different types of homes available is another factor to think about—and it’s a big decision!
Here at Compass Self Storage, we’ve helped more people move than we can count. Read further for our tips on renting vs. owning your home.
Owning a Home
Homeownership is a quintessential part of the American Dream that many (but not all) strive to accomplish at some point in their lives. Owning a piece of the real estate market, however small, is one big way to increase your long-term wealth. But it’s not all roses, of course.
Pros of Owning a Home
- Building equity. Over longer periods of time, homes appreciate in value. Since 2012, the average home has increased in value 7.7% per year. Making house payments almost functions like a savings account in that way.
- More Freedom. Owning a home means that you can change anything about it. From simple changes like paint colors to even major renovations, if you own your home you can make it more like you want.
- Wide variety of options. Houses come in all shapes and sizes. There’s something for everybody in many metro areas.
Cons of Owning a Home
- Anything breaks, you fix it. Owning a home doesn’t just mean owning the walls and floors—it means owning a variety of things that can break, such as appliances and HVAC systems and plumbing, many of which can be very costly to fix.
- High upfront costs. To get a conventional loan without paying private mortgage insurance (PMI), you need 20% of the home’s cost as a down payment. And if you qualify for an FHA loan with lower money down, your monthly costs will be much higher.
- Inflexibility. The buying and selling process can be a lot of work, and since you’re at the whims of the market when you decide to buy or sell, it can take a long time, too.
Renting
Renting provides a lot of flexibility and is more financially viable for a wider range of the population, and there are even some extremely nice luxury apartments out there for those who don’t want to bother with home upkeep. But it, too, has drawbacks—namely the inability to build equity via renting.
Pros of Renting
- Anything breaks, they fix it for you. Since you’re not the owner, you’re not financially responsible for upkeep. That’s a cost certainty that you won’t have when buying.
- Flexibility. Standard lease agreements last one year, but you can sign a shorter lease agreement or go month-to-month for a higher monthly rate.
- Amenity access. Apartments will often come with amenities like a clubhouse, a pool, exercise equipment, outdoor grills, and more. You get access to all of those amenities with your rent.
Cons of Renting
- Rent instability. While your monthly home loan costs can change, you can probably expect your rent to go up every year—sometimes by a lot, depending on the market at the time.
- No equity. When renting, you don’t get to keep any of the money you pay for rent, and it doesn’t appreciate in value.
- Pet inflexibility. Did you know that two thirds of U.S. households have at least one pet? Many apartments limit how many pets you can have and what type of pets you can have, as well as charge additional damage fees or pet rent.
Rent or Buy, Storage is Available Near You
Worried about storage if you’re renting or if you can only buy a small home? Don’t be. Compass Self Storage has a wide range of storage unit sizes whether you need some extra storage space or you’re looking to utilize storage to help you move. Find one of our storage facilities near you and get started today!
