A house. A yard. A white picket fence. This has been the traditional “American Dream” for decades – but that dream is evolving and changing in the face of new economic realities and changing preferences. This leaves us with a big question: what are the pros and cons of renting vs buying a home? Let’s take a look.
Buying a House vs Renting an Apartment or Home
What are the benefits of buying? They include:
- You don’t have to worry about a landlord. If you want to paint your bedroom pink or swap out an appliance for a smart version, do it!
- If you build or buy a model home, you can choose the features/functionality that are most important to you.
- You can upgrade and renovate your home as you want/need.
- You can build equity on which you can draw.
- The home may appreciate in value, making it a good investment in the future.
- The pride factor. This is yours.
What are the drawbacks of buying a house vs renting an apartment or home?
- Your landlord won’t be there to fix a leaky sink or make other repairs. Everything from foundation to roof is on you (excluding elements covered by builder warranties, if you have one).
- You will likely need to put down a sizable down payment.
- You may have to pay Home Owners Association (HOA) dues and comply by their regulations.
- It is more difficult to relocate (especially in some markets where selling can be disadvantageous).
Renting, too, offers pros and cons. On the plus side:
- Repairs are included.
- You don’t have HOA fees.
- Move-in costs are lower than when you purchase a home.
- Monthly costs may be lower.
- It’s easier to move/relocate.
The disadvantages include:
- You cannot make changes to the space/property.
- Renting doesn’t help your credit score.
- The landlord may not be on top of upgrades/repairs.
- You’re not building equity.
And, of course, you have to look at the market. In some cases, holding off on buying a house is the smart move given prices and conditions. In others, it’s a prime opportunity to build a portfolio, start earning equity, and get your piece of the new American Dream.