Renting vs Buying: An Objective Guide to the Pros and Cons
Over one-third of the people in the U.S. rent the homes or apartments they live in.
If you are currently looking for somewhere new to live and are debating whether to rent or buy, you might benefit by examining the pros and cons of renting.
By examining the pros and cons, you can decide if you should continue renting a place to live or buy a home.
As you aim to decide, here is a guide to help you understand the pros and cons of renting.
The Pros of Renting
Renting a place to live provides many incredible benefits, so let’s start with these. Here are four benefits people experience when they rent the places where they live:
One of the highlights of renting an apartment is the increased flexibility renting provides. When you rent, you can avoid a long-term commitment.
Instead, you can move around much easier. You won’t be tied to one place for years. Renting provides a more flexible way to live, ideal for people who are not ready to settle down completely.
Rental properties typically offer one-year leases, but some even allow you to rent by the month. Renting by the month gives you the most flexibility, but renting by the year still offers a lot of freedom and mobility.
When you buy a house, you lose some of this flexibility. If you ever decide you don’t want to live in the home you purchased, you’d have to go through selling, which takes time, work, and money.
The second benefit of renting is that your landlord takes care of all the maintenance and repairs.
You won’t have to come home from work and fix things around your house. For example, if you choose a rental that doesn’t have a yard, you won’t even have to do yard work.
Having a landlord means that you have someone there who is legally required to maintain and repair things that break your rental unit. Living in a place where you have no maintenance is a huge benefit that people love about renting.
Because you will not have to pay for the repairs and maintenance, living in a rental property provides a way to have fixed expenses.
You will have the same expenses each month. While your utility bills might vary, you will never have to pay for unexpected costs. Living in an apartment with fixed expenses offers a way to have more control over your finances.
Less Money Needed
One more advantage of renting is that it requires less money upfront. If you want to buy a house, you’ll need some cash to make it happen. With an apartment, all you need to develop is the first month’s rental payment and the security deposit.
It’s a lot easier coming up with the small amount of money needed to rent an apartment compared to the amount you need to purchase a home.
The Cons of Renting
Now that you understand the positive things about renting, let’s look at some of the primary drawbacks. Here are four disadvantages of renting:
One significant drawback to renting is not having the freedom to do things in your unit. The apartment you rent is not yours, so you cannot make changes to it. Instead, you have to wait for your landlord to fix things, and you’ll have no say in what they do.
When you own a house, you get the freedom to use it as you wish. If you decide to buy a house, you might want to start thinking about what to consider when buying a house for the first time.
Editor Note: If you’re currently residing outside of USA click this link for similar tips on buying your first home.
Owning a home has some perks, and one is that you will have the freedom to make the changes you want to make.
Your Landlord Controls What You Do
The second drawback of renting is the limits on what you can do. To move into a rental property, you must sign a lease. The lease might have five pages of rules you must follow as a tenant in the unit or more.
The term ‘renting’ means that you have a landlord that controls what you do in the unit. You must follow the rules or face the consequences of breaking them.
For example, if the lease prohibits pets, you cannot have a pet while living in this rental property. Likewise, if your landlord doesn’t allow pets, you can’t have them.
No Possibility of Growing Equity
The next downside to renting is that it is costly, and you have no possibility of growing equity in the house. So while your rental payments might be less than a mortgage payment, you are losing this money each month.
When you buy a house and make payments on your loan, you build equity in the home. Little by little, you build equity and will eventually own the entire home. Unfortunately, you do not get the chance to do this when you rent a place to live.
Fewer Tax Benefits
Finally, renting provides almost no tax benefits whatsoever. Your rental payments go to your landlord, and you get nothing to write off on your taxes.
Fortunately, when you buy a house, you can reap numerous helpful tax benefits. One tax benefit is the ability to write off the interest you pay on your mortgage loan. Writing this off helps lower your tax liability each year.
Weigh the Pros and Cons of Renting Before You Decide
As you can see, there are pros and cons to renting. There are also pros and cons to buying a house. If you’re thinking about buying a home, make sure you look into those, too.
You can learn more about renting and buying by checking our blog. We have many informative articles that you might be interested in reading as you strive to decide whether to rent or buy a house.