than 20% of the purchase price), home appraisal, home inspection, property taxes, and first year’s homeowner’s insurance. (Note: VA loans sometimes offer up to 100% financing, depending on eligibility) Loss of relocation flexibility. It’s much easier to break a lease and move out of town than to arrange for the sale of a residence. Selling the home from out of town involves special logistics and financial matters, such as dealing with the mortgage while the home is on the market. Financial loss potential. Homeownership builds equity over time; however, equity doesn’t equate to profit. If home values in your area go down or remain stagnant during your time as a homeowner, the appraised value of your home could decrease, putting you at risk of a financial loss when you sell.
DISADVANTAGES OF RENTING
No equity building. The monthly rent you pay goes to the landlord. It represents the fee you pay for using the property. You gain no ownership of the property, no matter how long you live there. No tax benefits. While homeowners can deduct property taxes and mortgage interest on their tax returns, renters aren’t eligible for housing-related federal tax credits or deductions. Home improvements go to the landlord. Any structural and decorative home improvements that renters make belong to the building owner and will have to stay behind when you move to a different place. Additionally, approval for desired major redecoration will be necessary. If your landlord doesn't like the improvements, you may even have to pay to repaint or restore the rental to its original condition.
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