There are both pros and cons to renting instead of buying a house. While we generally recommend home ownership if the situation allows, we admit there are reasons to rent.
Here are the pros and cons of renting a home instead of buying one.
Pros of Renting Instead of Buying a House
The first advantage to discuss is the flexibility you get by renting instead of buying.
Let’s say you just took a new job and are moving to the area. You think everything will work out well, but you’re hesitant to put down roots because you’re still learning the neighborhoods and different parts of the city.
In that case, renting might make sense. It lets you have a roof over your head without a long-term commitment. You have the flexibility to rent a place for a while, maybe one or two years, before moving into a home you buy in your ideal neighborhood.
The second pro to renting instead of buying is not having to deal with home maintenance. When you own a home, there is always some kind of home maintenance to do. Some of the examples are given below:
- Outside walls need to be painted every 5 years
- The roof can get damaged in a storm
- The carpet gets destroyed and needs to be replaced
- The HVAC system breaks, and you need a new unit
This stuff happens and it can be expensive to repair. Fortunately, you as the renter don’t need to deal with it!
Now let’s take a few minutes to talk about the cons to renting instead of buying.
Cons to Renting a House Instead of Buying
The first negative to renting is the fact you aren’t building any home equity.
Let’s compare two situations:
- Situation #1 is renting for 30 years
- Situation #2 is paying a mortgage for 30 years
In situation #1, you’re left with nothing at the end of those 30 years. You don’t own a home. In situation #2, you finish the 30 years with a home that’s completely paid off. That means your biggest expense is now gone, freeing up your money to do other things.
That’s huge, and it’s why homeownership is generally seen as the best financial path to take if possible.
The second con to renting instead of buying a home is you can’t make it yours. When you rent a house, you can’t make a lot of changes to the house. Sure, maybe you can paint a few walls. You can hang stuff up. But you can’t do something like dig up all the grass to build a nice garden or water feature in the backyard.
When you own a home, you can do that. You can make improvements to the home to turn it into your dream home.
The third con to renting a home is you don’t have a mental peace of mind of having roots. Renting can feel temporary and transient like you won’t be there for long. When you put down roots and buy a house, you plan on staying there for a while so you may be more likely to be social with the people around you and make friends.
There are pros and cons to renting a home. But if you plan on staying in the same area for a while – at least 3-5 years – we recommend buying a home. Give us a call at (562) 924-7884 and we’ll help you get a great loan to buy your dream home.