Renting vs. Buying a Home: Which One is Right for You?

Renting a home is full of ups and downs…but then, so is home ownership. If you can’t decide between taking the plunge on a mortgage or signing on the dotted line for a rental lease, there are some considerations from each side that can help.

Unsure About Renting Vs. Buying a Home? Consider Each Side

There are positives and negatives to each living situation, whether you rent or buy. Think about these factors long before you start the search for your next abode.

The Pros of Renting

Renting is flexible. When you choose renting versus buying a home, you aren’t tied to a mortgage. Leases usually cover a fixed window of time – anywhere from three months to two years is common. Moving out is as simple as waiting out your lease, or, if you don’t mind paying extra, breaking your lease early. You can even sublet if your landlord allows it.

Maintenance and repairs are not your problem. When you rent, you don’t own the building, so general upkeep isn’t on you. For instance, it’s the landlord’s responsibility to fix the leaky roof, repair the AC when it stops working, and more. In most cases, these kinds of maintenance will be outlined in the lease, and the landlord will be contractually obligated to take care of them.

Renting costs less up front. When you rent, you don’t have to make a costly down payment, nor will you have to take out a loan to cover it, plus closing costs. Instead, you’ll need to pay the security deposit, first month’s rent, and any other one-time fees – all of which are still lower than a down payment when totaled.

The Pros of Buying

You’ll build equity. As you pay off your mortgage for your home, you’ll slowly build equity. This means that you’ll increase your wealth by owning property. According to Money Crashers, the amount you pay on your mortgage goes two ways: toward your loan interest and principal. The money that is put toward your principal represents your equity.

You can change your home as you see fit. Unlike renting, when you buy a home, you can make additions and subtractions to it that suit your lifestyle and aesthetic. Hate the wall color? Paint it. Want a spiffier kitchen? Install new flooring and cabinets. Even better – do it all without having to ask permission (unless, of course, you have a spouse or a roommate – you might want to get their opinion before you plunge ahead with renovations).

You can build your home’s value. When you make the aforementioned changes and upgrades, you’ll also potentially boost your home’s resale value. This can equal money in the bank for you when it comes time to sell.

When Thinking About Renting Vs. Buying a Home, Take Your Time

Renting vs. buying a home can be a difficult decision to make, especially when the housing and real estate markets swing from buyer-friendly to buyer-beware in a heartbeat. Take your time, and think about your lifestyle and preferences before you head out on your chosen path.