Key Differences Between Owning and Renting a Home

When it comes to finding a place to live, both renting and owning have their advantages. Deciding which option is right for you comes down to your financial circumstances, long-term plan, and priorities at this moment. To help you decide whether to continue renting or take the plunge into home ownership, carefully consider the differences between owning and renting.

Renting

Renting is the option that many consumers choose due to the fact that, in many places, it is more affordable and also that it’s more accessible to younger consumers who may not have decades of good credit just yet. What’s more, renting presents far less responsibility (renters simply need to call the landlord in the event of a faulty furnace or broken toilet) and is a better option for consumers who foresee moving in the immediate future. Despite its many benefits, however, renting also has its fair share of drawbacks, ranging from unpredictability (it’s never out of the question that a landlord will sell a rented house) to the fact that renters can’t take the same liberties as homeowners to personalize the space (Such as painting, tearing out walls, and adding rooms).

Owning

From a financial perspective, it’s possible that home ownership will provide marked income tax benefits, although this depends greatly on your personal situation. What’s more, purchasing a home is an investment that allows consumers to build equity. Buying a home also allows you the freedom to personalize the space however you choose – from adding rooms to remodeling bathrooms and kitchens to make the home suit your personal requirements. Finally, owning a home can provide you with an income stream long after the home is paid off in the event that you choose to rent it. Like renting, however, home ownership also has its drawbacks, the most obvious of which are decreased flexibility and additional costs in the form of taxes and insurance.

Differences Between Owning and Renting: Which is Right for You?

When it comes to deciding if you should own or rent, the decision is a personal one. Like most large decisions, it will depend largely upon your unique financial situation (do you have the extra funds for a 20% down payment) and your short- and long-term plans. If you’re planning on moving in the near future or you’re not sure where your life will take you, staying in a rental is probably a wiser idea. If you’re looking to settle down and commit to a location for the long-term however, buying a home is a wonderful way to create a home base while building your personal wealth.  By weighing the pros and cons of the differences between owning and renting, and how it relates to your personal situation, you can make a better and more informed decision.