Guide | Home Buying
Renting vs. Buying
Are you trying to decide if you should rent an apartment or buy a home? The best way to decide is by listing out the pros and cons and finding out how much of a house payment you may be able to afford.
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.
- 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.
1 GOBankingRates, "Here's What an Average Apartment Costs in 50 U.S. Cities," The Huffington Post, June 07, 2016, accessed December 21, 2017, https://www.huffingtonpost.com/gobankingrates/heres-what-an-average-apa_b_10346298.html. Mike Bostock, Shan Carter, and Archie Tse, "Is It Better to Rent or Buy?" The New York Times, May 21, 2014, accessed November 08, 2017, https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html.
2 Mike Bostock, Shan Carter, and Archie Tse, "Is It Better to Rent or Buy?" The New York Times, May 21, 2014, accessed November 08, 2017, https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html.
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