Rent vs Buy: The Benefits and Drawbacks

To rent or to buy? This is a question to give some serious thought, considering it is one of the biggest financial decisions you will make in your life.

You may be standing at a crossroad, not knowing what path to take. You may have quickly asked around and gotten other people’s opinions but you can’t seem to come to a decision.

Both renting and buying come with their benefits and drawbacks. It is important to weigh the good and the bad before making your final decision.

Buying

For many people, buying a home is a dream that they aspire to achieve. It is a great accomplishment and people take great pride in owning a home.

When you buy a home, you gain an asset and build your net worth.

Unlike renting where you may feel like you are paying the landlord’s mortgage, when you make your mortgage payments they are going into your home.

Another benefit of buying a home is that you are free to make renovations and transform your home into something to be proud of. When you put money into renovating your home, you are increasing the value of the home.

A downside to buying a home is that you may need a hefty downpayment. If you don’t have enough money saved you may want to consider renting.

Renting

Renting has been looked down upon in the past. Some consider it “throwing your money away”, which can have some truth behind it, but with house prices going up, it might not hurt to take a look at the renting side.

With renting, you don’t have to pay a large down payment.

Another benefit of renting is that there is no long term commitment to living there. Typically, you give your landlord a 60-day notice before leaving. If you buy a home and you want to leave, there are many more steps you need to go through before you can leave.

Another upside to renting is that there is low maintenance cost and you don’t have to worry about having to pay for a plumber to fix a broken toilet, the landlord handles that.

Unfortunately, you don’t gain an asset when renting. Your money goes to the landlord, but when you pay your mortgage payments it’s going towards your house.

Making a Decision

If you are still not sure which path you should take or if you have any further questions, talk to us today!