Choosing between renting or purchasing a home in southern New Jersey is a major decision. It requires you to consider many factors, such as where you want to live, the prices of available homes, how long you may live there, and the cost of renting a similar home.
Let’s dive into the differences between renting and owning, and which may be right for you.
Renting: Pros and Cons
Renting a home is a great option if you are not quite ready to put down roots. If you aren’t sure if you will stay in the city you are living in for long or are thinking of taking a job elsewhere, renting gives you that freedom. It is much easier to get out of a lease than a mortgage, and you can even do short-term leases like month-to-month.
Similarly, it gives you the option to test out different living spaces. Not sure if you prefer a condo or a townhome? You can rent one for minimal commitment and feel it out!
If you are renting, you are not responsible for any maintenance. If the air conditioner breaks or the stove needs to be repaired, you are not on the hook for those expenses! All you have to do is call the landlord, and they will take care of it.
Renting also has some drawbacks, including the fact that you are at the mercy of the landlord when it comes to rental rates and renovation. Although the cost of your rent may be locked in for the lease term, there is no guarantee that it will not go up at renewal. You may also be limited in what you can do to your space when it comes to painting and renovations since the landlord gets the final say.
Likewise, if your landlord decides to stop renting or chooses to sell the home, you may be out of a place to live.
The major downside to renting is that you don’t have any ownership of your home and do not build any equity. While you are making monthly payments, when you decide to move you won’t get anything back since you don’t have the right to sell it.
Owning: Pros and Cons
The biggest appeal to owning a home is just that – it’s all yours! You get to decide how you decorate, renovate, furnish it – no one gets to dictate how you design the interior of your home. This means you also have more privacy, as no landlord is there to demand inspections or check-ins.
Owning your house also provides a sense of stability and permanence – this lets you put down roots and you can now call New Jersey your permanent home!
Although buying a home can be a bit more expensive upfront, you have the satisfaction of knowing that every payment you make brings you closer to owning the home outright. This means that eventually you will be done with those payments!
You can also reap the benefits of rising real estate prices – if the value of your home goes up, you can cash that in with a home equity loan to fund renovations, or keep that extra value as cash if you sell the home down the road.
The most obvious drawback to owning a home is the cost. You will likely need a sizable down payment to obtain a mortgage and closing costs can add up quickly. Likewise, if something breaks or needs repairs, you are responsible for those costs.
Owning a home also limits your flexibility to relocate and travel. You may have to give that job offer from the other side of the country a second thought – because selling your home is not as easy as getting out of a lease.
Which is Right for You?
So, renting or owning – which is right for you?
If you aren’t sure if you plan on staying in New Jersey for long, renting may be the best option for you. You should also consider renting if you don’t have the funds available for a down payment or closing costs – or an emergency fund ready to fix anything that may break in your home.
Owning a home may be the right choice if you plan on staying put for at least five years and are ready to take on the extra expenses associated with closing costs and maintenance. Ownership allows you to build equity, and your monthly payments are an investment.
Regardless of which you choose, make sure that you have a detailed budget and understand the costs associated with both options!