Buying vs. Renting

March 11, 2020

To rent or to buy? It’s the question everyone has to ask themselves when it comes to finding a place to live.

Buying a home is a big step and a good investment – you’ll build equity and your monthly payments go toward owning your home outright someday. On the other hand, buying is more complicated than renting and can come with unplanned extra costs. There’s no one-size-fits-all answer, but here are a few things to consider to determine the right option for you.


If your career or a sense of adventure have you hopping from city to city every few years, renting may make more sense for you. Buying and selling a home are long processes that can hold you back from taking that next opportunity.

Future Plans

A general rule of thumb is to live in the home you buy for at least four or five years to break even on closing costs and other fees. While you may not know exactly where you’ll be in five years, consider what your goals are for that time frame before buying a home.


When you own a home, you are free to make whatever changes you wish (barring any exceptions from a homeowner association). Such freedoms do not exist for most renters. In addition, homeowners don’t have to seek permission from a landlord if they wish to add a pet to their family.

Local Housing Market

Depending on where you live, buying a home could actually be less expensive than renting. Do extensive research on both the real estate and rental market in your area.


The costs of buying a home go beyond your monthly mortgage payment. The home buying process involves initial costs and fees that can add up to thousands of dollars. Ongoing costs like property taxes and home repairs are your responsibility, too – there’s no landlord to call when something breaks. Make sure you consider all of the costs of purchasing a home, including:

  • Up front costs. Homeowners should be prepared to pay a down payment, closing costs and other fees when purchasing a home. For renters, the up-front costs are much lower – usually only consisting of a security deposit that might amount to one or two times the monthly rent charge.
  • Upkeep. Leaky roof? Failing HVAC system? Broken water heater? As a homeowner, these are your problems – not a landlord’s (although a home warranty could help you cover some of these costs). If you don’t feel capable of handling these potential situations or simply wish to avoid regular upkeep such as yardwork, an apartment is probably for you.
  • Tax advantages. Renters do not receive any tax breaks related to their apartment, but homeowners may be able to deduct at least a portion of their mortgage interest. Homeowners should research and obtain specific legal or tax advice from their own counsel.
  • Equity. Homeowners have the opportunity to build equity in their purchase – a huge benefit when it comes time to sell or if they wish to take advantage of a home equity loan. Renters, on the other hand, will not get back any of the money they pay for the use of their apartment.

If need help deciding whether you should rent or buy, talk with one of our Mortgage Bankers today.

This content is for informational purposes only. Readers should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific advice from their own counsel.