There is so much to know when it comes to houses—when is the best time to buy, what do home inspectors look at, etc. So, it’s best to take things one step at a time by looking at one or two issues at once, rather than trying to wrap your head around the whole kit and caboodle. So, let’s break down two major parts that play into the renting side of things: What is the HUD and buying a home vs. renting one.
Many people have heard of HUD but don’t know what it means. What is the HUD? HUD stands for the United States Department of Housing and Urban Development. It is a department in the U.S. federal government’s Executive branch. The HUD aims to provide affordable, high-quality homes for people to rent and buy. They want to rid the housing market of discrimination and build strong communities of inclusiveness.
There are many programs within the HUD. The following is a list of a few of the programs:
*Public Housing Program
*Indian Housing Program
*Multifamily Housing Program
*Single Family Housing Program
Renting a House Vs. Buying One
Another tricky question many people face is whether or not they should rent or buy a house. What are the benefits of renting a home over buying one?
The following are some of the pros of renting:
*You don’t have to pay property tax. Since it’s not your property, you’re safe from paying taxes on it. Also, there are different plans for different houses, so you may even get a good deal on heating, air, gas, etc.
*You don’t have to pay to maintain the house (if you need a repair, you don’t need to worry about it)
*Flexibility (if you own a house, you have to go through the hassle of getting someone to buy your house when you want to move away)
*More space per dollar than if you own a house. When you own a house, you will likely have more space and more bang for your buck.
*There aren’t as many upfront costs when renting a home. When you buy a home, you have to put down a large portion of many and deal with other large costs, along with recurring costs. This doesn’t happen when renting a home.
*It typically takes about two decades for buying to become cheaper than renting, so in the short-term, it will save you a lot of money
The following are some of the pros to buying a home:
*When you buy a house, you build equity over time. Most of the time, when you buy a house and pay the mortgage each month, part of what you pay goes towards the interest of your home loan. The rest of it goes into the principal of the loan. Each dollar you pay towards the loan is giving you a dollar into owning your property, which is equity. When your equity gets up to 20%, you can reign in more benefits as well by tapping into the equity by refinancing your mortgage or through a loan. When you refinance your mortgage you will be able to either have a longer time to pay or have an interest rate much lower than the one you have prior.
*It can become an investment. If you decide to rent out either all or part of your property while you own it (whether it’s right after you buy it or a decade or two into the future), your taxes and mortgage can possibly be offset.
*You get great tax benefits when buying a home. There are multiple tax exemptions that homeowners benefit from, but only some apply for individual circumstances. When you buy a home, you can find out which tax benefits you qualify for. Two of these benefits are the Federal Tax: Deduction and Homestead Exemption.
*You have the freedom to do whatever you want to the home. Whether that’s painting the walls fun colors or renovating the basement or adding an extra bathroom, your home is completely yours once you buy it so you can do whatever you want to express your creative soul.
As you can see, there are many pros to renting a house, but there are a lot of pros in buying a house as well. If you are looking to save money in the short-term or can’t afford a down payment, then renting would most likely be your best option at the time being. However, if you are looking to save money over time and are looking into even creating an investment out of your home, buying is your way to go. Whatever stage you are at in your life, look at the pros and cons of each home situation, be it renting or buying, and make your best-educated choice accordingly.
Also, if you are looking into how HUD can be beneficial for you, perhaps through one of their programs and/or affordable homes, be sure to take that into consideration when looking to rent a home as well.