Renting a Home vs. Buying a Home

Buying a Home | Brian Merrick

Home ownership has long been seen as an integral part of achieving the American Dream.  With the average list price of homes in 2016 hovering around $410,000, though, this dream may seem difficult – if not impossible – for some Americans to truly achieve.


So while homeownership may be a dream you’ve always had, and there are certainly many benefits to buying a home, there are also untold benefits to renting a home that may make it a more sensible or even appealing option for you and your family. Ultimately, how can you know if renting or buying a home is the appropriate path for you and your family? Consider these benefits when deciding which option is your best fit.


Benefits of Renting a Home

Renting a home can be a smart financial decision for many people.  Here are seven financial benefits to renting:


1. No maintenance costs

When you rent a place to call home, then you are not responsible for most of the maintenance costs. If something in your rental breaks – from structural issues to aesthetics to appliances – the owner or landlord of the property is responsible for repairing it in a timely manner. This means you won’t have to worry about having enough contingency money to cover repairs, from anything as minor as fixing a stove burner to more major, money-gobbling repairs like a new roof.

2. Access to amenities

When you rent your home, you can shop around to find the home you want with the amenities you need. Many rental properties come with access to a gym, pool, or both.  They may also cover the cost of lawn and landscaping maintenance and snow removal (if you live in the northern climes). Owners of homes and condos need to pay thousands, or even tens of thousands of dollars to have access to many of these same amenities and features.

3. No down payment

If you make a substantial salary, but haven’t yet had time to accumulate much in your savings, renting will be appealing to you because it requires no down payment. Many home-buying loans require a sizeable down payment – often as much as 20% of the home’s purchase price – but that it not the case with renting. In most rental situations, the renter must pay only the first and last month’s rent in order to sign a lease.

4. No risk with a fluctuating market

The American housing market waxes and wanes – prices rise and fall. If you rent, you never have to worry about being underwater on your mortgage. This means that you owe more on your house than what your house is worth due to a declining market.  With rentals, you have a set monthly fee to live in the home – which is usually set out in advance at the start of each year. You’re never at risk.

5. Flexibility

Renting offers a flexibility that ownership does not. If you have a job that may require you to relocate, renting is probably a safer option. Then you need not deal with the stress of trying to sell your place when you need to move. Similarly, if you find yourself in a position of needing more (or less) space, it’s much easier to make that adjustment and move to a different rental than it is to find and buy a new house while selling the old.

6. Lower Insurance Costs

Simply put, renter’s insurance is much less expensive than homeowner’s insurance. This can equal big savings over the course of months or even years.

7. Lower Utility Bills

Since an apartment or rental condo is usually smaller than a single-family home, the cost to heat and power the space is lower and will ultimately save you money.


Benefits of Buying a Home

While, of course, the benefits of renting are appealing, there are also many benefits to taking the plunge – if you’re able – to buying a home. Peruse these seven benefits to owning your own home.

1. Builds Equity Over Time

Unlike renting – in which you are simply paying for the permission to inhabit an interior space in a building owned by someone else – when you own, you build equity. Generally speaking, homes usually appreciate in value, meaning their worth rises as time goes by.  This means that your home can net you a tidy profit when and if you decide to sell one day. Furthermore, as you make improvements to the home, the value of the property may rise even more sharply. For instance, in highly sought-after neighborhoods, you can recoup more than 100% of your investment in kitchen and bathroom renovations when you sell your home.

2. Costs Can Be More Stable

If you own a home, you can begin to predict the costs involved. Your mortgage will ideally be based on a fixed-rate interest rate, so your mortgage will never increase the way rent can. In addition, because once you a buy a house you are likely intending on staying there for the long term, you won’t often (or ever) have costs associated with moving the way a more nomadic lifestyle consistent with renting might.

3. Tax Deductions

There are a lot of tax deductions you can claim with homeownership, including “points” on your mortgage associated with closing costs and profit made from the sale of a home. Consult a tax expert to get the lowdown on these deductions!

4. Long-Term, Buying Is Less Expensive than Renting

As you begin to pay down your mortgage, you will be paying less and less to the bank in interest until, eventually, you have paid your house off. At this point, you will have one substantial monthly payment disappear. If you rent, you will have to pay your rent every month for the rest of you life. If you buy, after 30 years, you will no longer have a monthly payment to have a place to live.

5. Personalization is Possible!

While you are responsible for all the maintenance and associated costs of owning a home, you also are privy to the advantage of being able to personalize your home without asking permission of your landlord or the property owner. You can paint, renovate, remodel, add to the home, or make changes on a whim – all of these privileges are not guaranteed in a rental situation. You can also, in a way, personalize your community experience. Because you own a home in a certain locale, you may feel more tied to that area, prouder, and more eager to engage in community activities – especially if or once you have children enrolled in your community school district.



Undoubtedly, there are benefits to both renting and buying a home, and there is no right or wrong decision. Weigh the pros and cons with your family, and make the choice that best suits your needs and financial capabilities. Remember, whether you are renting or buying a home, a capable real estate agent is your portal to the home of your dreams!

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