Buying a House: Renting vs. Buying

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Pro's and Con's of Buying vs. Renting

If you are considering buying a house, one of the first decisions you need to make is whether buying a house instead of renting one is the right direction for you. Since owning a home is the "American Dream", many people simply assume that it's always to their advantage to buy a home, and for most, it is. Take a moment to review the following lists to see how your situation fits in.

Renting

More fixed costs for the term of the lease
Not gaining equity, but not losing it either
When the lease is up, you can just move
There is generally less work in maintaining a home or apartment
Smaller amount of "up-front" cash
No matter what happens with the value of the home, you will never gain equity
Limited - or no - ability to personalize your living quarters
No tax advantage to renting. Your landlord gets any and all tax breaks that are available

Buying

Variable costs
Equity may go up, down, or stay stagnant
If you want to move, home generally must be sold
Work needs to be done by you - or paid for by you
Generally a larger initial investment - the downpayment
Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase
The ability to remodel and redecorate the home to match your needs and desires
There can be tax advantages attached to home ownership. Consult competant legal and/or accounting advice for details for your situation

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