debate has been around for a long time; "Am I better off buying
or renting?" There is no automatic
answer; it depends on your individual situation. Do not make your decision
based on someone else’s experience or expectations. This is a
decision that only you can make and only after careful consideration.
there are times when it is best to rent. It is equally true that the
American Dream is to own your own home. This page
looks at some of the Pros and Cons of each. The list
below is not an all-inclusive list. The list is intended to provide
food for thought in allowing you to make your decision.
Advantages of Buying:
- If you
buy wisely and maintain your home, your home is likely to increase
(appreciate) in value, building even more equity in your property.
- The privilege
of ownership allows you to upgrade or change your property to meet
your personal preferences and tastes.
- The equity
you build up in your home is a value you can borrow against for home
improvements, college tuition, vacations or any purpose you choose.
a deeper sense of belonging and involvement. Property owners tend
to be more involved in neighborhood and community issues.
you pay on your home mortgage and your property taxes are tax-deductible.
In addition, any interest on home equity loans may be tax-deductible
mortgage payments will remain steady over the life of the loan –easier
Paying the mortgage over the life of the loan will give you free and
clear ownership of your home; (no more payments).
- You are
not subject to the demands or rules of the landlord. You can decide
whether to paint the wall, have a pet or plant a shrub.
- You are
assured of having a place to live as long as you make the agreed to
mortgage payments and meet your tax obligations.
- For first-time
home buyers, there may be first-time buyer programs that provide valuable
- As a
general rule, purchasing is nearly always financially favorable to
renting if you plan to remain in the property for five or more years.
Disadvantages of Buying:
You no longer have a free maintenance department to call if something
breaks. You should become familiar with maintaining your home and
be able to make minor repairs yourself. However, home warranty policies
can fill that need – talk to a Realtor!
may not have saved enough money to use as a down payment or to pay
the other costs associated with buying a home. If that is the case,
renting may be your best option. While there may be ways to reduce
the amount needed for the down payment and closing costs, the reductions
cause the monthly mortgage payment to increase and take a larger bite
out of your household budget. Talk to a Realtor!
costs money to buy and sell a house. There are various real estate
taxes, commissions, title fees, loan fees, reports and inspections.
A home must appreciate approximately 10% just to recoup these costs.
If you plan on moving within a three-year period it may make more
financial sense to rent than to own.
Advantages of Renting:
have no financial stake in the property and, provided you have a good
landlord, no need to worry about housing repairs.
- For a
short term, (ownership of 3 years or less) renting is probably less
- You are
not responsible for upgrades, modernizing, or making repairs to the
- If your
career or lifestyle leads to periodic relocation, it may make more
sense to rent. Unless you are consistently moving to an extremely
active real estate market, you probably cannot expect enough appreciation
in a year or two to compensate you for the costs of buying and selling
a home at each new location.
- If you
maintain a good relationship with your landlord (timely payments and
caring for the property), you may be able to avoid or reduce a rent
increase by negotiating with your landlord when rent increases are
it is easier to find a place to rent than it is to find a place to
- You have
less responsibility and financial commitment.
Disadvantages of Renting:
You are subject to future rent increases. It is not unreasonable
to anticipate annual rent increases of 3% to 5% per year.
landlord maintains ownership and control of all decisions that
affect the property.
- A landlord
can decide to sell the property or make other decisions that can leave
you without a roof over your head at the end of the lease period.
- You are
assured of having a place to live ONLY for the term of your lease,
provided you live in accordance with the terms of the lease.
- You may
be viewed as an outsider by property owners around you (especially
if you allow the appearance of the property to falter).
Print Friend Version