Renter

Being a renter has a few benefits. However, the benefits of homeownership well outweigh the benefits of renting. With being a renter you are usually signing a lease or rental agreement to live in a certain place for a 6 month or 12 month period of time. This can sometimes even be broken for relocation or other extenuating circumstances. Also, you can sometimes get someone to sublease the place if you no longer want to live there. Being a homeowner, you will usually have to sell your home before moving and get the home ready to sell. Normally, you do not have to do too much if any maintenance or fixing up of the rental place you live in.

A major disadvantage to renting is that you are generally not able to 'customize' your home. You can't paint walls or make any significant changes to your home unless it's approved by the owner. Most people like to make their home more livable by changing things to fit their unique tastes.

When you rent, you are not building any equity. Your home can act as your largest savings account that you have. Once you are a homeowner, you are able to build equity through paying down the principal of your loan, and the appreciation of your home's value. The equity can then be used to make home improvements (possibly building more equity), making a major purchase, paying off credit cards, or any other thing that you may see fit to use your equity on.

Renting is advantageous if your job requires that you move often due to frequent promotions and/or frequent transfers.

When you rent a home you most likely cannot write off the interest paid on the property. However if it is a renters market, you may be able to save more money with a lower monthly payment for the same type of home as compared to tax benifits of ownership.

Remember, when you buy, you can have a fixed housing payment for the life of the loan, usually 30 years.
When you rent your housing payment will usually go up each time you sign a new lease, averaging about a 3% increase annually.

» DISCLAIMER: The information contained in this article on 'Renter' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.