What To Consider Before Renting vs. Buying A Home

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Most millennials probably don’t have a huge chunk of money lying around for a down payment on a house or apartment. But if you’re at the point in your life when you have the option of renting or buying your home, we want to congratulate you — it’s a huge accomplishment. That said, there’s so much to consider before deciding to buy. Here are the major pros and cons of renting, as well as buying a home.


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If you decide to rent your home, you don’t own that space. Someone else does, and you’re paying them a certain amount each month just to live there. You’ll want to get renters insurance to protect your stuff.

Pro: You have more short-term financial freedom in renting than buying because you’re not locked into mortgage payment contracts. If you can’t afford your rent next month, you can move or sublet your space while you reside somewhere cheaper. And, even a 12-month lease is much less financial responsibility than having a mortgage.

Con: Your money isn’t being “invested” in anything. If you pay $1,000 a month to rent a home, there is no long-term gain from that expenditure. Over a year, the $12,000 is just gone.

Pro: You aren’t always responsible for every utility bill. Some buildings and landlords include utilities in your rent or cover a few. Also, they’re typically responsible for resolving functional issues in your apartment like plumbing and power outages.

Con: You’re subject to potential rent hikes, which could force you to move before you’d like to, creating a sense of instability.

Pro: There is a certain psychological freedom to renting — you don’t have to be tied down to a particular neighborhood, area or even city.

Con: If you’re still renting by the time you retire, you’ll still be paying money relentlessly every month, whereas if you own a house or apartment by that time, you’d hopefully have paid off your mortgage.


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If you decide to buy a home, you’ll likely need to make a down payment, and then get a mortgage loan that you’ll pay off each month. To make sure your items are safe, you’ll want to get homeowners insurance.

Pro: You’ll have a sense of permanency and stability. There are no landlord issues to be dealt with or potential rent hikes to worry about.

Con: Your house is an illiquid asset, meaning that you can’t simply trade it in for cash. You have to sell it, and you may not be able to do that in the timeframe you want or for the amount you want.

Pro: Depending on how many years you plan to keep your home, you’ll save money in the long run.

Con: If you decide to sell your house or apartment, you could potentially deal with nasty transaction costs, which could make or break how much money you take home after selling.

Pro: There are a number of ways that the value of your home could increase. It could be through renovations, or because you bought property in a location that became hot and as a result commands higher real estate values.

Con: You’ll be solely responsible for all utility bills, as well as any necessary maintenance and issues with your foundation, plumbing, etc.

The Bottom Line

There are a lot of significant factors to consider when deciding whether to buy a house or an apartment. Make sure your committed to living in a certain area and spending a specific amount of money over that time. And at a high level, ask yourself whether you value ownership over convenience. Think critically about your lifestyle and what you want from your home before making a decision.