It's a Money Thing®
Owning vs. Buying a Home
The average person moves residences about 11 times in their lifetime. That provides a lot of opportunity to confront the following question: is it better to own your home or to rent it? It’s a huge decision that affects your lifestyle as much as it does your finances, and the answer will vary depending on who you ask.
There are compelling arguments to be made for both sides and the resulting advice—though well-intentioned—can quickly become confusing and contradictory. So, is paying rent really just a waste of money? Or is it true that you can make more money by renting than by owning a home? Take a closer look at six snippets of common owning-versus-renting advice:
StabilityOwning a home gives you a stable living situation- you don't have to worry about whether or not your lease will be renewed. If you're planning to grow your family or plan to stay in the area for the foreseeable future, owning a home could be a good option for you. | MobilityRenting gives you the ability to easily move around once your lease is up. By contrast, the process of selling a house can be long, stressful, and complicated. If you value the freedom to chase educational or job opportunities as they arise, then renting beats buying a home. | LocationIf you're buying a home, your budget may limit your search to certain property types and areas. Renting often gives you access to properties and neighborhoods that would otherwise be out of your price range. If location is important, renting may be a better option for you. |
CustomizationAs a homeowner, you have the ability to renovate and customize your property to your liking. Renters are limited by the restrictions set by their landlord. If you live for home renovations and do-it-yourself projects, then you might find home ownership to be a better match than renting. | MaintenanceOwning a home means you are responsible for maintenance and repair issues. When you rent, it's your landlord's responsibility. If the thought of having to pay for major repairs freaks you out, it might be best to rent so that you can pass that stress and expense on to you landlord. | IncomeHomeowners that the option of renting their property out to generate income. Renters can take the money they otherwise would have spent on a mortgage and invest it in order to grow their wealth. Your decision to rent or buy may be influences by your need to generate income. |
When your friends and family offer you advice on renting and home ownership, they truly want the best for you. However, whether it’s better for you to rent or buy a home ultimately depends on a completely unique combination of your financial situation, your personal goals and a long list of variables, including your geographical location.
Do you need the mobility that renting provides you with, or are you ready to settle down for the foreseeable future? Does having the ability to customize and renovate your property justify the added expense of home ownership? Does your home need to be within a certain range of your workplace, school or other commitments? Is your home more of a sanctuary, or just a place to rest your head? By taking the time to fully understand your needs and your priorities, you’ll be able to cut through the conflicting advice and make the decision that’s right for you.