Rent vs. Buy: The Definitive Guide


Photo credit: Nathan Fertig

There are people who believe that you should always buy. They believe that renting is throwing your money away and paying for someone else to own what you paid for. This is true, sort of. Renting an apartment or a house is never paid for. You will not be investing in your financial future but does that mean that renting is not the smartest move for you at this point.

While the benefits of renting an apartment or home are not the same as home ownership, there are real financial benefits to renting.

Buying a home

The benefits of owning a home are many. Let’s look at the top reasons why buying a home is a smart idea.

Pros

  • The mortgage on a house is usually the same or less than renting a home or apartment.

  • At the end of the life of your mortgage, the home belongs to you.

  • You can claim the interest you paid on your taxes.

  • Owning your home eventually gives you equity, this equity in your home is a great asset.

  • Home ownership gives you more buying power and improves your creditworthiness

  • If you go to sell the home, you can usually recover your money. If you improved the home and the property value has remained stable, you can usually turn a profit.

  • If the property value is low when you sell you could lose money

Cons

  • Initial expense - when you buy, there is a hefty downpayment and closing costs to be paid before you can take possession.

  • When something breaks, it is your responsibility to fix it

  • You will have to do the yard work and maintenance yourself or hires someone

  • You will have to pay for homeowners insurance

  • Trash pickup, sewage, water, and pest control are your responsibilities

  • It is up to you to ensure the safety of your quest

  • Once you buy, you are tied down to an area. Moving means selling one house while looking for the next. Often the next house is in another city, state, or country. It is hard to time everything.

  • While buying a house seems like it is smarter for young people it could hurt them in the long run. The mortgage along with other bills may look like you are over-extended.

Photo credit: Jeany Meulen

Pros of renting

  • It costs much less to get into an apartment than it does to buy a house.

  • Your outdoor areas are professionally maintained

  • They pay the pool guy

  • It is easier to find living space that is close to the schools, events, and great shopping areas.

  • You do not have to be insured. You can buy renters insurance to protect your personal possessions, but you are not responsible for the building.

  • If you are in a position that may mean you could need to change locations. Your lease usually runs for 6-months to 12-months.

  • You have top of the line amenities that you do not have to purchase or maintenance

  • There are expenses involved in homeownership that you do not have to pay when renting. They include:

    • Trash pick up

    • Water and sewage

    • Repairs to the building and to the parking area

There is a large selection of apartments available to you in prime areas. On UMoveFree you can find a lot of Dallas apartment.

Photo credit: tookapic

Cons of renting

  • Living in an apartment means you will live close to other people and sometimes that can be a challenge.

  • The management will have rules about visitors, parties, and inspections to protect all of the residents.

  • You may have restrictions on having a pet

Final thoughts

As you can see, there are pros and cons to buying and renting. One is not necessarily better than the other. It depends on where you are in your life and how well buying a home fits into your life. When you are ready to settle down into a place, buying is a great option. But, until that time comes, enjoy living in a great rental with all the amenities.

Recommended Posts:

 

If you live in a city, you’ve likely seen the hundreds of private, purpose-built student accommodation (PBSA) buildings propping up all over the place.

New research shows that these buildings now account for 77% of…

Back