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Should I Rent Or Buy Right Now?

Should I Buy or Rent in Cape CodBuying VS Renting in Cape Cod

Buying a home versus renting is a major choice in a persons life and needs to be carefully considered.

You will find arguments for both sides, these are generally from people who are professionals in property management, real estate sales or real estate finance, which may be biased because they may be trying to sell a service or product.

It is in a potential Cape Cod home buyers best interest to weigh all their options before making this life changing decision.

Benefits of Renting in Cape Cod:

Initial Lower Acquisition Cost

When you rent a home your initial upfront cost is about 1-3 month’s rent payment. This is thousands of dollars less then when you purchase a home. For the short term renting makes more financial sense because it takes a few years at least to make up the initial upfront cost of purchasing.

Lower Qualifying Standards

While FHA and other government insured mortgage programs have what is considered to be a more flexible credit and/or qualifying guidelines than most traditional home loan programs, there is certainly a lot less paperwork required by most Cape Cod landlords and property management companies than when doing a Cape Cod mortgage loan.

Generally proof of employment, income and a decent credit history (or a good explanation) is needed to rent a home.

Freedom To Move

It’s easy to find a home through a reputable property management company, move in that weekend and then move when the rental contract expires. For someone who is new to a community and not sure what area they want to purchase a home or for someone whose job keeps them on the move frequently renting is an ideal choice.

Also, if you’re planning on moving in the next 3-5 years, then it may not make sense to purchase a home at this time. It takes time to build equity. It is unlikely you will gain enough equity to cover the 2-3% closing costs for title, escrow, transfer taxes etc plus the 6% needed to hire a knowledgeable agent who will help you navigate all the in and outs of selling a home… Just so that you can break even at closing.

Less Maintenance and Cost

If something breaks, a simple call to the property management company will generally solve the issue in 48 hours or less. If you own the home you are responsible for all the repairs yourself. Plus, renters don’t have to carry expensive homeowners insurance, pay property taxes or worry about interest rates adjusting.

Benefits of Owning:

Pets Are Allowed

Well, according to the rules and regulations of your county or neighborhood Homeowners Association, you can pretty much have as many domestic and exotic pets without having to pay extra deposits. No one can put restrictions on the breed, size or weight of your pet.

It may seem like a funny benefit to mention first, but the millions of dog and cat lovers would definitely rank this towards the top of their list.

Pink and Purple Walls

Yep, you can paint the inside of your house any color you choose. And depending on whether or not there is an HOA (Homeowners Association) in place, you could probably do the same thing on the home’s exterior. Landscaping, flooring, built-in shelving… it’s your property to renovate and grow in.

Peace of Mind and Security

The only way you would be forced to move is if the bank forecloses on your property due to a default in mortgage payments.

So basically, you don’t have to worry about a landlord’s financial ability to make mortgage payments on time. Plus, you can stay in your own property as long as you wish.

Tax Benefits

The US government has created certain tax incentives making it possible for many homeowners to exceed the standard yearly deduction.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

The following three components of your home mortgage may be tax deductible:

  • Interest on your home mortgage
  • Property Taxes
  • Origination / Discount Points


Remaining in one neighborhood for several years lets you and your family establish lasting friendships, as well as offers your children the benefit of educational continuity. Also, most homeowners enjoy stable housing costs with a fixed rate mortgage while rent has increased at an average rate of approximately 3% per year in the last ten years.

Appreciation of Property

Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2013, home prices increased on average 6.5%, according to the National Association of Realtors.

Forced Saving

The monthly payment helps in repayment of the principal amount. Also when you sell you can generally take up to $250,000 ($500,000 for married couple) as gain without owing any federal income tax.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

Increased Net Worth

Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

While the available tax advantages and potential for earned equity are generally highlighted by most industry professionals as the top reasons to own real estate, it’s important to remember that markets go through cycles.

Also, owning real estate that appreciates more than the rate of inflation may help contribute towards your overall investment portfolio, provided your maintenance and mortgage costs are kept low.

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