Renters...

 

  • Can neither gain equity nor can they lose it. Any improvements that a renter does to the home, and regardless of any outside influences that would increase the property value - renters will never gain equity.

 

  • Renters have to put very little money up front, typically only the first and last month’s rent as a security deposit.

 

  • Renters enjoy no tax advantages. All tax breaks and other advantages associated with owning property are enjoyed by the landlords but not their tenants.

 

  • Often are restricted from altering the property or making modifications such as painting the walls or installing fixtures.

 

  • Have the flexibility to leave anytime at the expiration of their lease contract. There are no worries about finding a suitable buyer for your property, and then waiting until it sells and closes.

 

  • Don't have to worry about maintenance of the home either inside or out. In multifamily communities such as condominiums, most renters have the convenience of a maintenance staff for repairs both minor and major.

 

Buyers…

 

  • Typically gain equity in their home over time, although it is possible to have their equity remain static, or even lose equity in a down market.

 

  • If they decide to move out of their home they must go through the process of putting their home up for sale and finding a suitable buyer, either with the help of a Realtor or without.

 

  • Often must put down a substantial amount of money compared to that of a renter.

 

  • Whereas a renters security deposit may be as much as the first and the last month's rent on the property, a downpayment to buy a property can be anywhere from 3% to 20% of the purchase price.

 

  • Can be subject to cost variations that have to deal with ownership of  real estate. These can include fluctuations in homeowner’s insurance costs, property taxes and other unforeseen expenses.

 

  • Are forced to maintain and or repair their own property using the services of a professional that they pay themselves. Buyers are totally responsible for all repairs that their property needs.

 

  • Have the freedom to decorate, remodel and paint their home both interior and exterior in any way that they see fit, as often as they wish.

 

  • Enjoy certain tax advantages that are associated with homeownership such as a homestead exemption.

 

  • As they pay down the mortgage, buyers will inevitably build equity over time regardless of whether their home value goes up or down.

 

  • Eventually they will own their home and have no monthly payment to make, as opposed to a renter who will always have a monthly rental payment.

 

Conclusions...

After seeing this comparison and weighing your options it might look as if neither buying nor renting represents the perfect choice. You must then take into account your lifestyle. This includes factors such as how stable your career is and the likelihood that you will have to move, how much travel you're required to do for business, and whether you plan to reside in your current city for a long period of time. Either choice has its advantages and disadvantages, but if you're unsure of what scenario will work for you, feel free to contact us and discuss your housing needs now and for the foreseeable future.

 

If you're interested in comparing the monthly cost of buying a home or condo in the Austin area versus renting one, check out the links below.

 

Homes for Sale in Austin TX

 

Homes for Rent in Austin TX