The decision to rent or buy a house presents a personal decision with pros and cons that need consideration before you can make a final call. Not only do finances play a significant role in renting and buying a home, from your income and savings to the amount of money needed upfront, additional fees, and total cost, but your preferred lifestyle influences your decision. The location of the property also matters as certain cities have higher rent or property prices on average than other cities. One option may work better than the other solely based on the city you live in.

Renting provides a reasonable option to people who don’t want the responsibility of homeownership or prefer a flexible lifestyle. This applies to houses or when considering buying vs renting an apartment. Monthly rent can amount to a lower sum than a mortgage payment, meaning money saved in the long run. Renters also avoid the excess cost of property taxes, the interest on mortgages, and maintenance and repairs for the property. Renting requires an application fee and a security deposit, which can be easier on your savings. Having a yearly lease also offers flexibility if you plan to move often. In fact, 40% of millennial renters say they plan to rent specifically because they enjoy the flexibility it affords. On the downside, rent can increase depending on your location’s popularity, and landlords can decide to sell the property or stop renting altogether. You might also have restrictions on personalizing the interior, making it difficult to feel at home.

Buying a home carries its own joys and responsibilities, and the homeownership rate in the United States is rising, calculated at 65.8 percent in 2020. When you buy a home, you can renovate the interior to your own taste. It also represents stability for staying in a location long term, at least three to five years or longer. Socially, you can engage with the local community, while financially, you build equity over the course of homeownership. Owning a home can even mean certain tax deductions. The disadvantages concern cost, from the down payment and closing cost to the financial obligation of homeowners insurance, mortgage payments, property tax, utilities, repairs, and potentially an HOA fee. A homeowner manages repairs and maintenance, and improvement projects can consume resources. If you plan to move within a couple of years, you may lose money when you sell because the home value appreciation didn’t increase over a long enough time.

In order to know whether to buy or rent a home, you need to consider your social, professional, and financial situation and understand the expenses involved with both. The money you’ve saved could itself sway you one way or the other. It also benefits you to reflect on what you want your life to look like. Renting offers freedom if you plan to move for work or social reasons while buying a home offers a comfortable stability for the next few years. Owning a property of your own may seem very attractive to some while others prefer to use their resources elsewhere. The choice of rent vs buy comes down to your preferred location, personal goals, and your financial ability.