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| Buying vs. Renting | Getting Started
Mortgage Basics | Credit Issues
Buying vs. Renting
There are many advantages to buying a home instead of renting. In many cases, the amount of money a person spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit available to homeowners, the savings can be significant. There are pitfalls too. The following chart shows you the benefits and drawbacks of both options.
Pros and Cons
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Buying
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Renting
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Pros
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Property builds equity over time
Sense of community, stability, and security
Free to change the decor and landscaping
Not dependent on anyone else to maintain the property
Part of the mortgage interest and real estate taxes are tax-deductible
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Little or no responsibility for maintenance
Easier to move
No closing costs and other home-buying fees
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Cons
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Responsible for maintenance, even when it’s inconvenient
Responsible for property taxes
Possibility of foreclosure and loss of equity
Less mobility than renting
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No tax benefits
No equity builds up, no matter how long you stay
No control over rent increases
Possibility of eviction
Possibility of a large deposit
Pet restrictions
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There's No Single Answer
As you can see, there are numerous pros and cons on each side of the decision. For many, it comes down to emotional considerations as well as financial ones. Do you want to feel that you are part of a community? Do you want stability and the experience of what many consider to be the American dream?
Then again, are you ready to give up the freedom of being able to move to a different neighborhood or city? Only you can decide if buying a home is a smarter decision than renting.
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