The myriad number of factors to consider when deciding whether to rent or buy a home are varied, which makes it difficult to determine which option makes better financial sense for you. In an effort to assist you in making the best decision, we have provided a generic list of pros and cons, although there may be many more depending on your specific situation. We have also attached a link for a financial calculator by Realtor.com to give you a better idea of which option makes more sense for you.
- Minimal upfront costs (1st and last month’s rent plus security deposits)
- Home repairs are typically the responsibility of the home owner/property manager.
- Good for short-term occupancy needs
- Good if unable to qualify for home purchase
- Not much flexibility as far as remodeling the property
- Typically must have renter’s insurance
- No financial investment
- Paying someone else’s mortgage
- Potential restrictions on personal use of property
- The value of your home can appreciate over time (especially with the way our market is today).
- Fewer restrictions on your use of the property (there may be some restrictions with home owner’s associations)
- As you pay your mortgage, you build equity along with increasing the market value of your property.
- You may rent it out if you must move elsewhere, which also helps you in paying down your mortgage.
- Tax breaks (mortgage interest and property taxes in your itemized deductions) resulting in a lower taxable income. Please consult your tax advisor for details.
- High upfront costs: An initial down payment (depending on your loan); buyer closing costs
- Home insurance is a must, if you have a mortgage.
- You are responsible for all maintenance costs.
- Typically must stay in your home at least five to seven years to profit from the sale of the home.