Pros and Cons of Renting vs. Buying in Idaho
The State of Idaho has many housing markets which are performing well above average at the moment. The city of Boise, in particular, is characterized as a red hot market by Zillow. Boise currently has a median home value of $300,800 and experienced a year-over-year (YOY) gain of 13.9% between June 2018 and 2019. That’s quite an increase! What’s more, Zillow projects that the Boise market will experience a YOY increase of 7.1% through June 2020. Along with Boise, the State of Idaho boasts many other cities with healthy housing markets as well, including Twin Falls and Pocatello. With plenty of desirable markets to select from, now is a good time to think about the pros and cons of renting as opposed to buying in Idaho. If you’re planning to make Idaho your place of residence, the decision to buy or rent many not be an easy one. Both renting and buying come with their own set of ups and downs. Ultimately, your decision will need to rest on a clear analysis of all relevant facts and circumstances of your situation. You will need to carefully examine your wants, needs and goals and then determine which option, renting or buying, best matches up with your situation.
To assist you in your analysis, we’ve put together a list of the pros and cons of buying as opposed to renting. Again, your choice will ultimately depend on your needs, but knowing about these pros and cons can be useful as you think about these two options. Objectively, there can be no doubt that owning a home carries a number of benefits; but, at the same time, there can be little doubt that home ownership also comes with plenty of potential drawbacks. We will go over the pros and cons and then encourage our readers to contact the team of mortgage professionals at Sammamish Mortgage to learn more.
To recap, we will cover:
Pros of buying in Idaho
Cons of buying in Idaho
Pros of renting in Idaho
Cons of renting in Idaho
Pros of Buying in Idaho
Buying a home certainly carries plenty of significant benefits. If you decide to buy a home in Idaho, one of the biggest pros will be the financial rewards. When you buy a home, you’re building equity, which means that the money you spend on the home isn’t entirely lost. If you obtain a mortgage loan for best mortgage rates, the money you spend on the loan isn’t thrown down a black hole. At some point in the future, you may decide you’d like to sell the home and move elsewhere. This wouldn’t be possible if you rent, because you wouldn’t be the owner. What’s more, market conditions could change after you acquire your home, and so it’s possible that the value could appreciate substantially. This might mean that you generate a nice profit if you decide to sell.
Home ownership has other financial perks as well. You can take advantage of multiple tax perks as a homeowner. One of the biggest perks is the principal residence exclusion under Section 121 of the U.S. tax code. This exclusion allows you to eliminate a portion of the gain (or profit) you realize when you sell. This is a huge perk, and obviously something not available to those who rent. Aside from the financial benefits, owning a home gives you a lot more creative freedom. You can remodel, customize and decorate your home in any way you please. This isn’t always possible when you rent.
Cons of Buying in Idaho
Although there’s no denying the pros of buying, there can be cons as well. Perhaps the biggest con relates to the costs associated with buying a home. When you buy a home, you will incur a wide variety of costs, and some of these costs may be unexpected. For instance, if you need a mortgage, you may need to acquire private mortgage insurance. No matter what, you will need to pay home insurance and property taxes. Buying a home also comes with significant repair and maintenance costs. When you rent, these costs are often absorbed by the landlord or management complex, but this isn’t the case when you’re the owner. You will be in charge of all repairs and upkeep. Another con of buying is that you have less flexibility. Suppose your neighborhood changes and you want to move; or, suppose you just want to explore a different part of the country. When you buy, packing up and moving becomes much more difficult, and so moving will require a lot more work.
Pros of Renting in Idaho
If you’re thinking about renting a place in Idaho, this can come with many pros. One pro of renting is predictability. When you rent, you generally will have a very fixed set of costs which you can predict reliably from one month to the next. In some cases, you may have utilities which can vary from month to month, but typically your other costs will be more or less fixed. This level of predictability can be very beneficial for someone who is looking to establish a budget or who doesn’t want to be bogged down by unexpected expenses. In terms of lifestyle, renting carries several benefits. For one thing, you’re not so stationary as compared with buying, and so you have the option to move quite easily. Suppose you start renting in Boise but get a job offer in Twin Falls; when you rent, this move will be very simple.
Cons of Renting in Idaho
Renting comes with cons too. Not surprisingly, arguably the biggest con relates to finances. Even though renting comes with predictable costs, you have to remember that you cannot recoup any of the money you spend on rent. When you rent, you are paying directly to your landlord or management complex, you are not contributing to a mortgage. When your lease ends, you will essentially have nothing to show for your payments, other than a good rental history. Renting also carries cons in the way of lifestyle as well. Many rental complexes (and some individual landlords, as well) have lifestyle restrictions. Rental complexes often have rules relating to pets, smoking, noise, and so forth. When you rent, you usually don’t have a lot of latitude when it comes to decorating and customizing your home. Rental complexes often forbid tenants from painting their walls or making any structural changes, for instance.
The decision of renting vs. buying in Idaho isn’t an easy one. While buying a home will definitely bring a host of benefits, buyers will also inherit many arduous responsibilities too. Renting can be financially draining, but it carries a lot of advantages in the way of low stress and lifestyle. Again, to make a proper decision, you need to do two things: (1) you need to understand your goals, and (2) you need to understand precisely the ups and downs of renting vs. buying, and how those ups and downs will align with your goals. If you are adamant about building equity, then clearly renting is not your choice. If your main concern is keeping your costs predictable, then buying may not be the right decision.
Whatever your decision, we encourage you to reach out to a mortgage professional for more information. A highly qualified mortgage professionals can help you in a variety of ways. A professionals can help you better understand key Idaho housing markets, walk you through the mortgage loan process, and even assist with understanding the general buying process.