Renting Vs. Buying A home Pros & Cons

Author: Mohamed T Gulamali

​Buying a home for the most part overwhelmingly wins, although renting does have a few benefits as well.

We will go over the pro's & con's of the list below.

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​Investment	Privacy	Pickiness
Family Benefits	Responsibility​​	Rolling Stone
​Cost		Tax Write-Off's

Investment

Buying:	Renting:
Ability to sell property at a profit. Can collect rent depending on # of units. Access to equity to pay off debts or fund a venture.	No opportunity

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​Family Benefits

Buying:	Renting:
You can tailor fit the home to meet the needs of you and your family, the upgrades will likely increase the value of your home as well.	​You can make upgrades to the property with your Landlord's permission.

Homeowners' Children vs. Renters's Children
(habitat for humanity nyc "benefits of homeownership")

• Math Scores +9% 
• Reading Scores +7%
• ​Home Enviornment +22% 
• Become a Home Owner +58%
• ​Behavioral Problems -2 to -3% lower

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​​Cost

Buying:	Renting:
Short Term: The price in the same area including everything will be a bit higher but keep in with all the benefits taken into account nothing in life is free.	Short Term: renting may be cheaper but has none of the long term benefits.
Long Term: the mortgage which will be eventually be paid off will be cheaper than rent.	Long Term: renting has no benefits especially since once the mortgage is paid off the payments are done.

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​​Responsibility:

Buying:	Renting:
Owning a property requires more responsibility than renting.  You have to make the payments till the mortgage is paid off and are also responsible for repairs.	Renting has minimal responsibility since all you have to do is come up with the rent for the Landlord every month. ​

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Privacy:

Buying:	Renting:
If you're buying a 1 family detached home you've got all the privacy and quietness you desire. If you're taking advantage of rental income you'll still get privacy especially since tenants are more considerate when they know the landlord lives I the same building.	​Renting does afford you some privacy but not as much as home ownership does.

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​Pickiness:

Buying:	Renting:
Value	​Renters can make renovations as long as their landlord agrees but keep in mind in the end fiscally it only raises the equity of the landlord.

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​Rolling Stone:

Buying:	Renting:
​Buyers don't have the ability to just pick up and move without repercussions.   ​ When a home owner does decide to move they will have the ability to move out and collect rent or sell the property and collect a significant profit.	Renters have the ability to move with relevant ease depending on the terms of their lease. ​

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Tax Write-Off's

Buying:

Renting:

​Mortgage Interest: You can write off 100% of the entire Interest portion of your mortgage payment which consists of Principal & Interest.  In the beginning almost the entirety of your payment goes towards the Interest portion on a sliding scale till the loan is paid off. Property Taxes: You can write off 100% of the property taxes.  ​PMI or MIP is tax deductible but only if you’re single and your income is below $50,000 or if you’re married and your income is below $100,000 If you own a 2-4 family property you can additionally write off the following as well:  Insurance Repairs Supplies Utilities Depreciation Management Fees Advertising Commissions Legal and Professional Fees Cleaning and Maint Discount Points: Money paid to lower the interest rate is tax deductible

​Renting has no Tax Write-Off's

Author: Mohamed T Gulamali

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Free Info:

• Free E-Book: Mortgage Basics The Guidebook
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