Buying vs Renting

Buying vs Renting

Both renting a place and buying a home come with their own sets of pros and cons. Which one is a better deal? Ultimately, it will come down to your own financial situation. Take a look at these renting and buying advantages and disadvantages to help you make the decision:

Renting Pros

  • Maintenance and yard work is typically included at no extra cost. If the dishwasher breaks, you won't have to worry about paying for the unexpected expense. 
  • You have the flexibility to get to know an area before buying a home.
  • You won't be tied down long term. Most leases are 12 months or less, so you are free to move if needed.

Renting Cons

  • If you own pets, you may have a pet deposit ranging anywhere from $100 to $500, as well as an additional monthly pet rent fee.  
  • You aren't building equity when renting. When you're ready to move, you will not have an asset to sell.
  • Rent may vary and typically increases each year. Just because it is affordable this year, may not mean that it's affordable the following year. 
  • Housing expenses cannot be deducted, so you won't receive any tax benefits for renting.

Buying Pros

  • As you make your mortgage payments, you'll be building equity and increasing your net worth. 
  • If you choose a fixed rate mortgage, your monthly payment will remain the same.
  • Generally, you can deduct the interest paid on your mortgage loan on your taxes.
  • You have creative control once you own your home, so you can decorate it without having to get a landlord's approval. 
  • Once you own a home, you can live there as long as you'd like. You're not forced to move simply because a lease is up.

Buying Cons

  • Most lenders require a minimum 5% down payment, so you need to have quite a bit saved up to purchase a home. If you can't put at least 20% down on the house, you may be required to pay Private Mortgage Insurance each month. 
  • You personally have to take care of any maintenance or yard work that your home requires. If you fail to meet requirements and are part of a Home Owner's Association, you could be fined. 
  • Your home is not guaranteed to increase in value over the years. If you move at a bad time, you may have to sell your home for less than what you paid.  
  • Mandatory Homeowner's Insurance premiums will usually be tied to your monthly mortgage payment, raising the overall payment. 

Still not sure whether you should buy or rent? Talk with our Mortgage Specialist to help figure out what's best based on your financial situation. 

Ready to buy a home? Take a look at what Entrust has to offer by clicking here