Renting vs. Buying

Becoming a homeowner can give you lots of freedom. Gone will be the days of landlords telling you that you can’t paint your bedroom a different color. You can decide exactly how to decorate and renovate your home, and your kids can finally get the bedroom of their dreams.

Rent costs are on the rise, averaging about $1,200 a month out of 50 surveyed cities in the United States. With more affordable housing options, like manufactured homes, you can often buy a home with a very affordable—mortgage payment. Instead of putting the money into some else’s pocket and never getting to own the place you rent, when you become a homeowner, you are investing in something that will be entirely yours.

Costs to Consider When Choosing Between Buying vs. Renting

When deciding to rent or buy a home, you should research all the costs that both entail to help you decide which works best for your budget. Both renting and buying have initial recurring costs to think about.

Buying Costs to Consider:

• Initial: Closing costs such as down payment and other fees.
• Recurring: Monthly expenses such as mortgage payments, maintenance, utilities, property taxes and homeowner’s insurance.

Renting Costs to Consider:

• Initial: Upfront costs such as fees to sign the lease, the security deposit, and the first month’s rent. Depending on the landlord, you may also have to pay the last month’s rent up front.
• Recurring: Monthly costs such as rent, utilities if they are not included, fees for pets and renter’s insurance1.

There are several pros and cons to buying a home. For example, while homeowners may experience more maintenance costs and less mobility, they can enjoy many long-term benefits including2:

• Potential tax deductions (consult a tax professional to determine deduction eligibility)
• Freedom of choice and design
• Pride of homeownership
• More room for a growing family
• Outdoor living and recreational space

Renters may experience downsides such as rent fee hikes, lack of privacy, noise, and pet restrictions, but receive perks like:

• Low up keep costs
• Community resources

Being ready to buy a home is entirely up to you. Whether you’re not yet ready to settle in one area or maybe you have found the town you want to grow old in, the decision is yours but don’t hold yourself back. Make your own lists of pros and cons to buying versus renting to decide if you should rent or buy.