Pros and Cons of Renting or Buying a Home
Tuesday, March 5, 2019
Read Time: 3 mins
Finding a place to live can seem like a daunting task. You're probably thinking of many things when you make this decision. One of the first of which is probably, "Should I buy or should I rent?". Before you make a decision or take the big leap into home ownership, you should think about which option is best for you. Renting and buying both have their advantages and disadvantages. Before making your choice, we recommend going through a list of pros and cons for each option.
Is renting the best option for me? If you choose to rent a place, you should consider a few key items. To help with this process, we've created a list of some pros and cons of renting a home.
- Renting gives you more flexibility and freedom. You can make a quick decision to move out, especially if you have a month-to-month lease.
- You have no responsibility for maintaining the rented area. You can tell your landlord if something is broken, and they do all the repairs and maintenance for you.
- Renting may be cheaper than owning a house. Also, because you aren't footing the bill for repairs or maintenance, you know exactly how much you will be spending at the end of the month.
- If you work or travel frequently, then renting a house or an apartment could be the best decision as you won't have to worry with the responsibility of maintaining the property.
- Your landlord or property managers could increase your rent each year. Also, if you are on a month-to-month lease, these are more expensive.
- You cannot build equity if you're renting a property. It will be your home, but it won't be your asset.
- There are no tax benefits to renting a property.
- You cannot make any changes to your house or your apartment without your landlord's approval.
- Many homes available for rent have a no pets policy or restrictions on pets. If they allow pets, this may come with extra fees. So if you're an animal lover, finding a place to rent that allows pets can limit your options.
- You are bound by the rules and obligations in your lease agreement.
Should I buy? Just like renting, there are benefits and disadvantages to purchasing a home. To help with this process, we've created a list of some pros and cons of buying a home.
- Owning a house can give you a feeling of stability and settlement. There is also the pride of owning a property.
- You have the ability to make the home your own. There is complete freedom of redecorating and renovating the property. You can have pets. You can change appliances, and you can renovate and much more without anyone stopping you.
- Buying a house could serve as an investment if it increases in value.
- There could be tax benefits. You can deduct your mortgage interest payment. Plus, you could build equity while paying off your loan.
- You have your own privacy.
- Owning a house requires more responsibility. You have to pay for your own maintenance or make time to take care of the household projects yourself.
- A home is not a liquid asset. This means that if you ever plan on selling your property, it may not be as quick of a process as you expect.
- Property taxes could go up each year.
- While your home could serve as an investment, you could also lose property value over time instead of gaining it.
- Initially buying a house requires savings and larger initial investment for a down payment. Meaning, you could potentially pay more up front.
- Buying a home could be more expensive than renting one, depending on the type, size and location of the home.
- Your monthly expenses may vary depending on what you need for the house.
Although money plays the most important role in deciding whether to buy or rent a home, it is not just about the money. Many other factors play a part in determining what you should choose. How long you plan to live in a particular location, your plans for the future, your career goals, etc., all should play an important role in your decision.
Looking to buy a home? Check out our mortgage options.