Renting vs. Owning a Home in NJ

It’s a big question with no easy answer: Is owning a home vs. renting a better option? Owning a home is the American Dream; it comes with a lot of satisfaction, but there’s one hassle that comes to mind: you aren’t sure you can afford it. Deciding whether to rent or invest in a home comes down to a good credit score, adequate savings, and personal income. Your credentials will reveal if buying a home in New Jersey is right for you or if renting is still the better option? Let’s compare and find out which works best.

Your intended length of stay has a significant impact on whether it makes sense to buy or rent. If you plan to stay put for a couple of years and purchase a home, you can capitalize on home equity. Home equity is the portion of your home that you’ve paid off. It’s the difference between what the home is worth and how much you owe on your mortgage. Home equity accumulates over time; this means as home values go up, your equity grows. Equity provides many great opportunities between savings and financing options.

The advantage of owning a home is that a homeowner does not have to worry about raised rents. Homeowners are concerned about equity accumulating. An appraiser determines the home equity value by the home’s current market value based on conditions and comparable properties in the area. Homeowners usually tap into home equity to enhance their home or to purchase a new one if needed. Once the home value is approved, they have access to determine how to use the equity.

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If you own a home, you can be eligible for several special tax breaks. You may be able to deduct your mortgage interest at tax time. If you buy a home, you can deduct interest paid on up to $750,000 in mortgage debt or $375,000 if filing separately. Interest paid on home equity loans or lines of credit is still deductible. Not every homeowner is eligible to itemize deduction changes. The tax laws changed in 2018, so if you purchase a home, ask an expert if you are eligible for the current amount in deductions.

Renting is feasible for the person who’s constantly on the go; no commitment needs to occur; once a lease is up, you’re free to move as you please. However, renting has its financial hurdles that you must overcome, such as security deposits, first and last month’s rent at signing, non-refundable application fees, and much more. Monthly payments are usually higher than a monthly mortgage cost, but you do not have to worry about property taxes or repairs. With the high charges a renter pays monthly, you have to think, is it worth it? In the end, renting has no gain. You’re paying someone else’s mortgage and helping the landlord gain equity on a property you have no privilege to. While you rent, there are no ownership rights; you have less freedom to renovate and no say in what goes in and out of the apartment. Rental prices can fluctuate at the landlord’s discretion. As opposed to a homeowner who can have a fixed-rate mortgage and become locked into one amount monthly with no raises.

Think about where you see yourself in five years; if that answer has a specific location such as New Jersey, it’s time to think about purchasing your dream home. Buying a home in New Jersey is an exceptional selection. There is stability with owning a home. If you plan on having children, you can raise them in your new home, and if you have pets, you can give them the yard they always deserved. The advantage of owning a home is that it’s your physical place and your investment. If you are unsure what your plan is for the next five years, we recommend sticking to renting for now.

Deciding whether to buy a house or continue renting isn’t an easy choice. That’s why it’s wiser to partner with an experienced person who can help you navigate your options. If you’re looking for a local real estate agent who will offer you trustworthy advice no matter your budget, give Casa Real Properties a call. Casa Real Properties only endorses the top agents in New Jersey. If buying a home in New Jersey is suitable for you, contact us today!