The decision to rent or buy a home is one that many Americans will face at some point in their lives. Many people dream of owning their own home, but is it actually cost effective to do so? While owning a home is a dream for many, figuring out if it’s truly the best financial move requires a closer look at both your money and your lifestyle.
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Renting is appealing because it comes with some built-in conveniences. You don’t have to worry about the costs of upkeep and repairs that homeowners deal with. You also have the freedom to move on short notice if your circumstances change. But renting has its downsides, too. You may also have to deal with rent increases each year. Plus, you’re not building any long-term financial security by renting.
On the other hand, buying a home is often seen as a good investment. Your monthly mortgage payments go toward building equity, meaning you’re slowly owning more of your home. Homeownership can also come with tax breaks, like deductions on mortgage interest. But buying a home comes with a lot of upfront costs — like a down payment and closing costs — and ongoing expenses such as property taxes.