Should I Rent Or Buy A Home? Check Out These Pros & Cons!

Buying vs. Renting

brandon lampron

Thinking about your next move can be a big step! Most of the time it comes down to signing a one year lease or taking out a thirty year mortgage. Renting is a lot less of commitment, but many do not like the idea of dishing out rent each month with no financial return in their monthly payments whereas in a mortgage you are likely building equity. However, homeownership is not always a smooth ride. Below we will go over the pros and cons of both buying and renting!

 

Buying

Pros:

  • Can make desired improvements/upgrades

  • Possible increase in equity due to improvements and raising property value

  • No landlord to impose rules (single/multi family homes)

  • Possible tax breaks when filing returns

  • Can rent out property in future for additional income


Cons:

  • Possible decrease in declining property value

  • Requires 3.5-20% of home cost as down payment

  • Other expenses besides mortgage and utilities

  • Responsible for any repairs, remodeling costs

Renting

Pros:

  • Initial deposit is less than most homes

  • Usually a short commitment to pay rent

  • Not responsible for maintenance and repairs

  • No property tax bills

  • Less possible homeownership expenses

Cons:

  • Landlord can increase rent every year

  • Landlord can limit smokers, pets, and household members

  • Might move more often

  • Can be forced to move with 30 days notice

  • Cannot build equity

  • No tax benefits

Why should you buy a home?

It could be a smart investment to buy a home if the property value in your area appears to be on the rise. If you were to sell in a few years, there is a possibility you could see a sizable profit - but like most other investments, it is not something to rely on. A few reasons that buying might be the right the option for you:

  • You plan to stay in the same place for at least 2-5 years.

  • The rent you could get for a home in your area would pay for your mortgage and expenses.

  • Mortgage rates are low enough to keep your monthly mortgage payment affordable.

  • You’re willing to put some “sweat equity” into your purchase, that way you can purchase something less pricey.

Should you rent a home instead?

Even though owning your own home offers more security and a lot of benefits, there are some drawbacks. Bigger construction projects like roof replacements and siding can come up quick. It is much easier to get out of a lease than to sell your house. Here are some reasons why you might want to rent:

  • You aren’t sure how long you will want to be in a specific area due to work, family, or other reasons.

  • You won’t be able to afford — or don’t want to bother with — the maintenance or repairs a house may need.

  • Your finances are variable or likely to change soon, potentially making it difficult to keep up with a mortgage payment.

  • You want to be in a living situation that is more flexible.

Brandon Lampron