Does it Make More Sense to Rent a Home or Buy One?

Own
The biggest benefit to owning your own home is the investment you’re making in your future. Every mortgage payment you make is paying for your own piece of the American dream. When the mortgage is paid in full, your payments stop and you own the home outright. You will pay a lot of interest on your mortgage over the life of your loan, but that interest is also deductible on your tax return, and so are your property taxes.

As the home’s owner, you are responsible for all maintenance on the home and its appliances. If the air conditioner has to be replaced in the middle of the summer (or any time for that matter), the hefty price tag is yours and yours alone, unless of course you have a warranty. Also, when you move in to a home, you’re usually responsible for your own washing machine, dryer and refrigerator, to name a few. When you add that to the down payment required for a mortgage, you’re looking at thousands of dollars in upfront costs to own your own home.

On the flip side, it’s your house. You can decorate it however you want, landscape it the way you want and even sell it if you want. Knowing you’re in total control can be a satisfying and comforting feeling.

Rent
Renting a home doesn’t require nearly as much money up front. It’s also beneficial when you’re moving far away and don’t have enough time to visit the area ahead of time. Renting a home gives you the necessary time to get acclimated to the area, learn about the local schools and either shop for the home you want or build one.

When you rent a home, the responsibility for maintenance generally falls on the landlord’s shoulders. If something breaks, you call the landlord to fix it. There’s no out-of-pocket cost to you, but you’re at the mercy of the landlord’s time and budget. He or she may not replace something as fast as you would replace it, and the quality may not be the same.

Decorating, landscaping and home improvements also are not your decision to make. Some landlords will give you free reign in their house, but in most cases, you’ll have to get permission from the landlord to do something as simple as painting a room.

There are pros and cons to both renting and buying. It really depends on your financial situation and on how much control you want over your living space. If you do rent, be sure to enter into a legal contract to protect your interest in the home, and be sure to buy renters insurance. This protects all of your belongings in case a fire, theft or tragedy causes damage to your belongings.