It’s one of the most common questions among today’s new generation of home seekers—does it really make sense to rent long term, rather than buy?
To help answer this question, here are three times when it’s better to buy than to rent.
1. When you’re planning for retirement
Those who chose not to buy will likely have to pay rent for the rest of their life. A recent article in Hawaii News Now reported that senior citizens on a fixed income are finding it harder and harder to afford renting in Waikiki. What would you do if you were collecting social security every month, only for your landlord to increase your rent? Most likely, you would have to alter your lifestyle drastically just to keep a roof over your head. Our advice? Buy now so that in 30 years you will own your place outright and the thought of monthly payments will be a thing of the past.
2. When you prefer fixed payments
In most areas, your landlord will increase your rent as the years go on, meaning your payments go up but your environment stays the same. With a mortgage, however, your payments will remain the same whether you’re in year one or year 30 of your mortgage. With current low interest rates, you may be able to find a property to buy for the same cost as it is to rent.
3. When you want Home Owner Tax incentives
Many people don’t realize that the ongoing tax benefits, primarily in interest deductions, can add up to thousands of dollars each year. Generally speaking, most people can take the amount of money they’re paying in rent together with the money they’ll save in taxes and qualify for a mortgage, assuming interest rates remain low.