Buying versus Renting – The Ultimate Debate

By Kevin Overton

A debate that has raged for years is whether or not it is better to buy or rent. Like many things in life, the answer is quite simple – it depends! It depends on quite a few different factors – some of these could be the amount of time you’ll stay in the house, the costs of home ownership versus renting, or what area you want to live in. Whatever the factors are in your life I will discuss three aspects that might lend themselves in your circumstance towards choosing to either buy or rent.

  1. How long are you going to stay in the house?

To determine whether to buy or rent you must first determine the time frame for your stay in the house. If your job is stable and the plan is to stay where you are for several years then you should consider buying a house. Buying is normally a good idea if you are staying at least 5 years. This will allow you to build equity over the long term and pay down the mortgage to protect against movements in the market. The initial costs of home ownership will also be spread out over a longer period of time. With a low fixed rate loan, you will know what your future payments will be. A mortgage payment which is thought to be really high today won’t seem nearly as much 20-30 years in the future.

If you are staying for a short time in an area due to a temporary work assignment or your job isn’t secure, it might be better to rent. Renting might also be a good idea if you want to explore the area and investigate the local housing market prior to purchasing.  Being able to move quickly and easily is another one of the benefits of renting (especially if you didn’t sign a long-term lease).

  1. What are the true prices of home ownership versus renting?

Homeownership allows you to build equity and to eventually pay off your mortgage. There are, however, other expenses that might not be considered when purchasing. Some of these would be property taxes, homeowner’s insurance, or homeowner’s association fees. Home maintenance is another thing to consider. If the toilet gets clogged or the roof leaks it is up to you to either fix it yourself or pay to have it done. You are also responsible for all of your utilities and appliances.

On the other hand, renting also has its costs. Some of these are the initial security deposit and first and last month’s rent. To protect your belongings, it would also be a wise idea to purchase renter’s insurance.  Some of the fancier apartment complexes even charge additional fees for the on-site amenities. Rent increases can also be an unpleasant surprise for renters- a cost that can be hard to predict.

  1. Where do you want to live?

If you find a house that you can afford in a part of town that is safe and has good schools, you might strongly consider purchasing the property. You will have all of the benefits of home ownership – including peace of mind. Your home value will also appreciate more in a better neighborhood. This can serve as the home where you will raise your family.

If on the other hand, you live in a very expensive city where home values are really high, you might consider renting.  The houses in the area might be really expensive, but the rents might not be that high. This will allow you to live in a nicer area with better schools, shopping centers, and local attractions. Depending on the city, it might be more cost effective to rent. Sometimes homeowners that purchased years ago will even rent their houses to a nice family for less than market value.

Should I buy or rent?  As you can see this is not always the easiest question to answer. Hopefully, this article will help you to make a sound decision the next time you have to consider buying versus renting.

Here are several "rent versus buy" calculators that might be useful to you as follows:




Kevin Overton



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