To Rent vs To Own a Home in St. Louis or St. Charles County
Berkshire Hathaway Home Services offers St. Louis real estate, but also provides the information to make the right decisions. Buying a home is a big decision and there are pros and cons to both buying a home and renting. If you choose to rent or buy, we can help you find the right St. Louis real estate with many options in Holly Hills, Dogtown, Boulevard Heights, and many more neighborhoods to choose from.
Advantages of Renting
- Less financial responsibility. Renters generally don’t have to do the work in maintaining the place. They don’t have to fix the water heater or a leaky faucet. The Landlord is responsible for appliances and system maintenance and the costs associated with it.
- Minimal commitment. When the lease is up, you can just move.You don’t have to take care of making sure someone else is going to rent that space.
- Less work. There is generally less work in maintaining an apartment.
- Less up-front cash. Up-front costs can be less when renting than with buying. You generally only have to put up the first month’s rent plus a security deposit, which is usually less than a down payment on a home. After you’re done, you get your down payment back provided the place is in acceptable condition.
Disadvantages of Renting
- No Equity. As a renter, you have to pay so much every month for rent, but that money never goes toward ownership. Instead, you help pay your landlord’s mortgage bill each month.
- Limited personalization. There are some restrictions on painting and improvements that can be made. Renters generally aren’t allowed to fashion their living space to their preferences, like putting in different flooring or putting up wallpaper. Your improvements do not increase the value of the property.
- Limited Space. In apartment-style renting you have limited space for your personal items. Apartment usually only provide a storage closet or storage locker instead of a full garage or basement.
- No tax advantages. Since you are making rent payments you can't deduct mortgage interest from your taxes. Your landlord gets any tax breaks.
- Close Proximity to Neighbors. Noisy or nosy neighbors can also pose more of a problem since, in most apartments, you share walls with them.
Advantages of Owning
- Personalization. Because you own your home, you can design and decorate to your own taste. If you want to add an addition or remodel the kitchen, the only thing limiting you is your imagination. And the more you remodel and upgrade, the more you increase the value of the home.
- More Space: Typically in a home you have more space such as a basement, attic and garage.
- Equity. When you buy a home, part of the money you pay towards your mortgage every month gets applied toward your principle. This means you build equity every time you make a mortgage payment, until you eventually own your home outright.
Homeowners also build equity through appreciation. Your home is typically your largest financial asset and the value can be positively affected by factors like home improvements, inflation and the demand for land.
- Tax advantages. Tax benefits can make home ownership one of the most profitable investments you can make. Mortgage interest is tax deductible.
- Low or No Down Payment Programs. In today's market you don’t have to have a large amount of out-of-pocket up-front costs. There are loan programs that allow you to buy a home with little or no down payment.
There are even loan programs, such as interest-only loans, that allow you to buy a more expensive home than you might have thought possible.
Disadvantages of Owning
- Selling Commitment. If you want to move, you have to arrange for the sale of your home.
- Financial & Maintenance Responsibility. Work needs to be done by you, or paid for by you. This includes everything from routine lawn care to major repairs such as appliances, plumbing, electrical and roofing.
- Possibility of Value Loss. While historically, home values across the country have risen, there’s always a possibility that home values in a local area may fall.