Owning a home can be the ultimate fulfillment of the American dream. Often many answers hinder a first time home buyer. What is the process? Is owning really better than renting? How do I get pre-approved for a loan? I want to buy a new home should I still use a Realtor? The answer is…maybe.

Each buyers individual needs & financial situation changes this answer. This is why speaking to a professional is so important. Since there are specific obligations to your current lease and management has obligations to each owner a plan should be discussed. In doing so all may benefit from a tenant deciding to leave a rental and purchasing a home.

Pros & Cons of Renting -

Pros

• Flexibility to move easier when lease ends

• Steady monthly payment for the term of the lease

• Landlord handles repairs and maintenance

• May be cheaper if for a shorter period of time

Cons

• Historically more expensive long term as no equity is created

• No equity in a tangible asset

• No tax deductions

• No or little choice on remaining in the unit long term

• Additional fees and deposit requirements that come with leasing

• Pet requirements

• Not free to renovate or alter the property

Pros & Cons of Ownership -

Pros

• Your monthly payment goes towards your equity and eventual full ownership/equity

• Tax credits help offset some costs to owning your home - $500,000 married capital gain deferred*

• Option to sell the home for a profit

• The abiliity to leverage your equity for loans, cash-out-refinances and home equity lines of credit

• Freedom to renovate or make changes

• Pride of ownership

• Stability (you, not the landlord, can choose when you’ll move)

Cons

• Down payment expense

• Maintenance is paid by you now

• How long you think you’ll live there

• Cost of renting a similar home for shorter period

• Purchase price

• Flexibility on where you want to live

NAR chart for historical differences between renting & owning. Historically 6-8 years is when home ownership gains are realized*.

Median Home Prices Entire MLS Middle TN - Live updated chart

*Comments are based on historical data and do not reflect guaranteed results. Real estate involves unknown risks and price fluctuations. Data of the past does not necessarily reflect the future and each investing individual should do their own research.