The question of buying versus renting is a complicated one, and one that depends on a few factors including (but, like always, never limited to) the stage of life you’re in, the market, whether you plan on moving soon, your preference for doing yard work, and a myriad of other specificities that can greatly complicate your decision to buy or rent. But fret not! This post will lay out the basic ins and outs and will give you a bird’s eye view of the road ahead.
Why rent? Renting affords someone greater flexibility, which is perfect if you expect major changes to be coming along that will necessitate an impending change of location. Moving on from a rental property is easy because you can simply move out at the end of your lease, rather than spend the time and money selling a home.
Besides flexibility, rental properties eliminate auxiliary responsibilities such as yard work and home maintenance. Rentals also appeal to clients with lower credit scores.
Why buy? Nationally, average rents are rising to meet the national mortgage payment, to the point that in most markets the cost of mortgaging versus renting is negligible (making the decision to buy an obvious one). Those who aren’t expecting to move any time soon (3-4 years at the least) will also stand to benefit from purchase.
Additionally, buying allows your money to work for you (instead of for your landlord) as making consistent mortgage payments is beneficial to your credit and your property will appreciate over time. A fixed mortgage also guarantees that you’ll be paying the same amount every month—in contrast to rent which is subject to change between leases.
So where do you stand? Renting is ideal for anyone who
- expects to move in 2-3 years
- elects to offload maintenance responsibilities to the rental owner
- has poor credit
- is in a rush to find quick housing
By contrast, buying is ideal for anyone who
- expects to stay put for longer than 3-4 years
- wants to build credit and reduce debt
- wants the freedom of a fixed mortgage
Of course there is only so much we can touch on in this blog post, but hopefully this gave you a better idea of the pros and cons of renting and buying. How have your experiences buying and renting been? Let us know in the comments below.