Should I Rent or Buy a House? What to Consider When Renting vs. Buying a Home

Making the leap from renting to buying can seem like a big decision. Renting vs buying a home depends on a variety of factors from long-term goals, finances, and lifestyle. Whether you’re moving to a new city or your lease is coming to an end, you may be wondering if you should rent or buy a house.

In this Redfin article, we’ll help you determine if it’s better to rent or buy a house with your lifestyle and finances in mind. If you’re moving to San Diego, CA, or looking at homes for sale in Richmond, VA, here’s what to consider when renting vs buying a home this year. 

Key takeaways

• Renting vs buying depends on your finances, long-term goals, and lifestyle.
• Buying a home allows you to build equity, has tax benefits, and gives you pride of ownership.
• Renting allows you the flexibility to move, stable monthly payments, and no additional repair costs. 

Renting vs. buying: pros and cons

As you decide whether you should rent or buy a house, consider the pros and cons of each.

5 pros of renting a house

1) Home repairs: If something breaks in a home you’re renting, it’s typically on the landlord to fix, not you. So when the air conditioning unit stops working in the middle of summer, you don’t have to spend thousands of dollars to fix it.

2) Monthly housing expenses: For the most part, when renting a house or apartment your monthly housing costs will stay the same, aside from minor fluctuations in utility costs. Your base rent doesn’t change, and you likely won’t need to budget for any emergency repairs, maintenance costs, or factor in property taxes.

3) Flexibility: You can move out when your lease is finished or relocate to another city without having to worry about selling your home. Renting a house also allows you to see which home styles you like, which floor plans you don’t like, and if a neighborhood is the right fit, before buying a home.

4) Investment opportunities: Renting can free up some of your income, since you won’t be spending it on repairs or upgrades. You may have extra funds, also called disposable income, to invest in building your finances rather than investing in a home. You may even be able to save money towards a down payment.

5) Time to improve credit: Renting also gives you the opportunity to work on improving your credit score if needed. It gives you time to pay off any debts that may be impacting your credit. A better credit score can give you better loan terms, so taking the time to do this can help you in the long run. 

5 cons of renting a house

1) Temporary: The biggest pro of renting is also the biggest con. If you’re planning to live in a city for years to come, renting may not be the best option, as most leases last for only a year or two.

2) Uncertainty: There’s no telling when the property’s owner may decide they don’t want the responsibility of being a landlord anymore. When your rent is up, they can decide to sell, which means you’ll need to relocate. Similarly, when your lease is up, your rental may not offer you the option to renew your lease.

3) Possible rent increases: When renting, each year you renew your lease and it’s possible your rent will increase. Depending on whether you negotiate rent, the new cost may be out of your budget. In that case, you’ll likely need to find a new rental.

4) No home equity: As a renter, you don’t build any equity — the percentage of the home’s value you’ve paid for, rather than what your lender still owns. When you pay your rent each month, you’re helping someone else build equity.

5) As-is home: You usually don’t have the option of modifying a rental to suit your needs. Some landlords may allow you to make small changes like painting the walls in your living space, but you’ll probably have to paint them back to the original color when you move out.

5 pros of buying a house

1) Building equity: Homeownership helps you build equity and potentially increase your home’s value over time. More equity can mean greater profits when selling and the ability to borrow for major expenses.

2) Customizable: Buying a home means it’s yours — you can paint it, remodel it, and customize the space to your liking without having to follow a landlord’s rules.

3) Stability: You won’t have to worry about a landlord who may decide to sell the home once your lease is up. You have the freedom to decide how long you want to stay in the home, and ultimately if or when you want to sell.

4) Mortgage payments: When you own a home, you’ll have stable mortgage payments each month, as long as you have a fixed-interest mortgage. This will stay consistent over time and you won’t have to worry about a landlord raising your rent each year. 

5) Tax benefits: There are several tax benefits of owning a home. Some homeowners qualify for tax breaks, which are reductions in your federal or state taxes. Many first-time buyers can receive tax deductions, such as on their mortgage interest, which can save you money at tax time.

5 cons of buying a house

1) Closing costs: Buying a home comes with upfront expenses like inspections, title insurance, lender fees, and other costs, typically 2%–5% of the home’s purchase price. There are downpayment assistance programs that may help you cover these costs.

2) Home value: Ideally, your home’s value will increase between the time you buy and the time you sell, but it doesn’t always. Events outside of your control, such as a change in the economy, can potentially reduce your home’s value.

3) Home maintenance expenses: With owning a home comes the responsibility of home maintenance. If there’s a leak in the roof, it’s up to you to deal with and pay for repairs. You’ll also need to be prepared in the case of an emergency repair, such as a burst pipe or broken heater.

4) Investment limitations: Buying a home ties up most of your money in one asset, leaving less for other investments. However, home improvements can add value and pay off when you sell.

5) Property taxes: As a homeowner, another important cost to factor in is property taxes. Depending on the area you buy a home in, property taxes may be a substantial cost to consider. If you’re renting an apartment, you won’t pay property taxes. If you’re renting a home, your landlord will likely factor property taxes into your monthly rent payment.

Should I rent or buy a house? Questions to ask yourself

Everyone has a unique lifestyle, financial situation, and set of long-term life goals that impacts their decision whether to rent or buy a house. To sort this all out for yourself, consider three main questions.

Does renting or buying work with your timeline?

One of the most important questions to consider when deciding between renting versus buying a home is your timeline. For example, if you’ve just moved to a city, expect a job change soon, or don’t plan to stay in the community long, it may make more sense to rent. Selling a home costs money, and if you sell too soon after buying, it may not be worth it.

On the other hand, if you’ve found a community where you’d like to put down roots, buying may be the better option. Owning a home offers more stability and potentially more financial benefits for those who plan to live in an area for more than just a few years.

Where do you see yourself in 5 years?

Another way to view renting versus buying is determining where you see yourself in 5 years. What does your 5-year plan look like? Do you want to move to a new city or state eventually? Do you want to take a year off and travel? Or are you looking to stay in your city for the foreseeable future? Is your career based in the city you live in? Answering these questions can help you determine whether to stay renting or consider buying. 

How much can you afford?

The costs of renting and buying vary, and your budget plays a big role in deciding which is right for you.

Buying a home requires upfront costs like a down payment and closing costs, which depend on your loan, lender, and housing market. Some buyers put down as little as 3%, but a larger down payment can lower your interest rate and mortgage insurance costs. Beyond the purchase, you’ll need to budget for mortgage payments, maintenance, utilities, and homeowners insurance. A mortgage calculator can help you estimate your costs. If you can afford to buy and want more stability or control over your living space, homeownership could be the better long-term option.

Renting typically has lower upfront costs — you’ll usually just need an application fee, security deposit, and first and last month’s rent. It can also give you time to improve your credit score, potentially helping you secure a lower mortgage rate in the future. However, if buying a home would drain your savings or stretch your budget too thin, renting may be the smarter choice for now.

Keep in mind that rent often increases when you renew your lease, and in some markets, it may end up costing more than a mortgage payment. A rent vs. buy calculator can help compare costs, but it’s just a starting point — your decision should also consider long-term financial goals and lifestyle needs.

Will renting or buying a home fit your lifestyle?

Beyond finances, renting vs. buying is also a lifestyle choice.

Buying a home is a long-term commitment that allows you to build wealth over time. It also comes with the freedom to customize your space—whether that means remodeling, painting, or making upgrades. If you want stability and the ability to put down roots, homeownership may be the right move. In some markets, buying a home with a yard, garage, or extra space may even be more affordable than renting a similar property.

Renting offers flexibility and fewer responsibilities. If you don’t want to worry about maintenance or unexpected repair costs, renting might be the better fit. It can also make more sense if you have a busy lifestyle, move frequently, or aren’t ready for a long-term commitment. For some, renting aligns better with financial goals, allowing more freedom to invest or save before taking the leap into homeownership.

Is it better to rent or buy a house?

Whether you make the decision to rent or buy a house, it’s a personal decision and one that means taking a look at different aspects of your life. From your financial situation to lifestyle, job situation and long-term goals, there are many factors that can determine whether you should rent or buy a house. If you’re still not sure which option is right for you, talk to a mortgage lender or real estate agent who can give you professional guidance.

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