upfront costs. Some are paid out-of-pocket after the seller accepts your purchase offer, while others are paid at closing. These include the deposit, down payment (typically 5% to more than 20% of the purchase price), home appraisal, inspection, and property taxes. Loss of relocation flexibility. It’s much easier to break a lease and move out of town than to arrange to sell a residence. Selling the home from out of town involves special logistics and financial matters, such as dealing with the mortgage while the house 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. No matter how long you live there, you gain no ownership in the property. 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 the desired major redecoration will be necessary. After all is done, the decision to buy or rent depends on the prospective home buyer’s circumstances. There’s no denying that a home of your own is a sound financial and a significant emotional investment. An investment in a home can also mean an investment in your future.
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