Renting vs Buying a House: Pros and Cons

Should you buy or rent a home? The answer often depends on your finances and plans. When looking at renting vs buying a house pros and cons need to be weighed.

• What’s the best way to spend your money?
• How long are you planning to stay in your home?
• Are you changing jobs or possibly moving?

Renting vs Buying a House Pros and Cons Breakdown

Buying a home is one of the biggest financial decisions you will ever make. And money is an important factor when making this decision.

Buying:

When buying a few items to be aware of are:

• The down payment amount.
• Closing costs, insurance and taxes.
• Monthly utilities.
• Ongoing home repairs – such as the water heater, plumbing and appliances.

But there are strong reasons to buy:

• Interest and property taxes may be deductible*.
• As you pay down the loan principle, you will build equity, which can be an excellent asset for securing a loan or a line of credit.
• Overall, most home values increase over time, which increases the amount of equity and your return on investment when you sell your house.
• Once you pay the mortgage off, the home is all yours.

Renting:

When renting the advantages include:

• Your initial cash outlay will be smaller – often a deposit of a month’s rent.
• The money you save can be used for other investments.
• The landlord is responsible for repairs of things like plumbing or electrical.
• It’s easier to move quickly if you change or lose your job.

Drawbacks include:

• You’ll never own your home, no matter how many payments you make.
• There are no tax advantages.
• Rent could rise or your landlord could sell the property.

It’s important to do what’s right for and your financial situation. Before deciding, do your research and create a list of renting vs buying a house pros and cons

*Consult a tax specialist to learn what interest and property taxes are deductible.