The decision to rent or buy a home is a big one, and one that many sit at a crossroads to for a time. There are many financial considerations to make, as well as lifestyle choices. Here is a handy list of pros and cons to renting and buying.
Pros to Buying
- It's your home, which means you have more control over how you landscape it, decorate it, remodel it, and more.
- You can get to know the neighbors, and make friends you will likely keep for a long time! This also means you may have more opportunities to get involved with your community and activities, etc.
- There are tax breaks for home owners.
- You can build equity in your home over time - so you may make a profit on it when and if you ever decide to move.
- A more stable environment -- you don't have to worry about landlords evicting you at the drop of a hat, or an increase in rent.
Cons to Buying
- Cost is obviously a huge deterrent when deciding to purchase a home. Borrowing a lot of money and committing to pay interest on it for the next few decades can be an overwhelming decision for many.
- Buying a home is a huge commitment, and since you might be there for quite some time, deciding which home to purchase can be challenging, both based on location (having a stable job, being close to family, etc.) and cost.
- Less mobility - you will be more entwined in where you live. The cost of moving and finding an agent, etc. can be time consuming.
- Keeping up on payments is essential and could be costly if you don't.
Pros to Renting
- Low-level of commitment required to rent, you usually only have to stay put in a place for 6 months to a year.
- High-level of mobility: because of this low level of commitment, its easy to move, switch jobs, go to school, etc.
- You aren't obligated to pay maintenance costs and property taxes, as your landlord is in charge of making sure things are working properly.
- You don't have to save up for a down payment like you would on a home.
- You aren't going into vast amounts of debt for decades.
Cons to Renting
- The landlord could evict you for various reasons, and you could suddenly not have a place to live.
- You do not have freedom over whether you can have a garden, or pets, or other nuances you could decide as a homeowner. You also don't have liberty over choosing decorations, remodeling, etc.
- Rents can increase over time.
- You aren't building equity or taking advantage of tax benefits that you can as a homeowner.
- Your life is just a little bit less stable, in that you aren't as entwined to your community in your temporary abode.
You can see there are many perks and disadvantages to either decision, it mostly depends on where you are at in your life. Have you found a community you are particularly fond of, with good schools and activities? Then it may be time to buy a home. If you are in a less certain place, then renting might be the right option for you.