Having your own space is an important part of adulthood. But how you secure that space depends on a lot of factors. In some situations it makes sense to purchase and own a home; in others, renting makes more sense. Here are some pros and cons to each scenario:
When you are a renter, there’s only so much you can do with your space. Sure, it’s yours to live in for a time, but any significant structural or cosmetic changes need to be cleared by the landlord. So while you get to occupy the space, you largely need to leave it as is. When you own a home, it is yours to modify and customize to your heart’s content.
When it comes to repairs and maintenance, a significant benefit to renting is the ability to call the landlord when something goes wrong. The landlord assumes the risk in most situations, saving you hundreds if not thousands in would-be repairs. When you own a home, anything that needs maintaining or repairing is paid for by you.
Owning a home allows you to secure an asset that will likely appreciate over time. It can be held long-term, for as long as you choose, and can be sold when you desire. Renting a home is a short-term proposition, where you pay a fixed amount to a landlord for as long as you live there, but the equity remains the landlord’s.
Another aspect to consider is how often you plan on moving around. For those unsure or who plan on moving regularly, renting makes more sense due to the flexibility of a lease vs. a mortgage. However, if you plan on staying put, it’s usually a better deal to get a mortgage and pay it down over time as you watch your equity in your property increase. In some locations, this option may even be cheaper than renting each month!