Deciding whether to build, buy or rent depends on many factors including location, prices, your budget and how long you plan to live there. There are several advantages and disadvantages to any of the options you take.
Advantages of Buying
- Paint your home any color you want.
- Tax breaks on interest rates and property taxes for mortgages under $1 million.
- If you have a high Fico score and good credit report you will be charged lower interest.
- Potential profit in the future sale of the home. If your sell it for what you paid, it’s like free rent (intererst excluded).
It is not be a good idea to buy your home if the mortgage payment, taxes and insurance are more than 30% of your income. This could be an indication that you do not earn enough to buy your home, and could actually be unable to keep up payments on the home. In addition there are maintenance costs.
If you are buying, visit the house at different times of day. Check any repairs that are needed, and read over the contract well. Ask about rights to parking and communal areas. Always research the history of the property. A title company will make sure that the seller has clear title and is legally able to sell you the property. Read six more things to know before buying a home.
Advantages of Renting
- Flexibility in moving. Wider range of locations.
- The landlord is responsible for major repairs and maintenance.
- You are protected under the Landlord and Tenants Act.
- You avoid negative equity whereby the value of your home goes below what you have paid to buy it.
On the other hand, renting may mean less features. you may have to do without a yard. You are not able to customize the home in any permanent way.
Advantages of Building:
- You can customize the layout and size of the rooms.
- The home and contents are brand new.
- It is personally satisfying if you are involved in the building of your own home.
Remember that building your own house will involve making lots of decisions, which can be very stressful. It is also a long process, but finding the right contractor can save you time and money.