To buy or to rent? This age-old question is one that many people are faced with at some point in their life. There are a number of factors to take into consideration when asking yourself this question, based on your personal situation and goals.
Let’s look at some of the advantages and disadvantages of each, as it can be surprisingly affordable to take the leap and purchase a home!
Advantages of buying:
- Surprising affordability – the percentage of income needed to afford median rent continues to rise, while the percentage needed to afford a median home has dropped
- Tax breaks on your mortgage interest
- Build equity through ownership
- Mortgage payment is the same monthly
- Freedom to renovate or decorate as you please
Advantages of renting:
- Repairs and maintenance are often covered by the Landlord
- No property taxes to pay
- Easier to relocate than trying to sell a house
- Move-in costs are often more affordable than a down payment
- Utilities are sometimes covered
- Free amenities at some rentals, such as a swimming pool, fitness center, etc.
Disadvantages of buying:
- Down payment needed can be substantial
- Cost (and sometimes labor) of maintenance and repairs are your responsibility
- Value of home may fluctuate (not always in your favor)
Disadvantages of renting:
- You’re paying someone else’s mortgage
- Pets are not always allowed in rental units
- No ownership or creation of equity