To Rent or to Buy: That is the Question

When it comes to deciding whether to rent or to buy, there is debate as to which is “better.” There are advantages and disadvantages to both buying and renting, as there are different circumstances when people are deciding where to live. Sometimes it makes more sense for someone to rent at one stage in their life, and at other times it makes more sense for them to invest in a home. It’s all about which option is the best for you.

When making the decision whether to rent or buy, arguably the biggest factor is your budget. Your financial stability plays a huge role in the decision to rent or buy, but there are other key factors to consider:

How much are you willing to or able to spend?

Is your lifestyle more suitable for renting or for buying?

Do you travel frequently?

Are you between jobs, or in a situation where you might have to relocate for your career?

Let’s make this easy. A pros and cons list may be cliché, but it can lay out everything there is to know when it comes to renting and buying.

Pros of Renting:

- Cheaper than owning a home
- No maintenance
- If traveling a lot, the property will be intact when you return

-Flexibility – can move out at anytime
Cons of Renting:
- Increased rent every 6-12 months
- Need approval from landlord to make changes
- You sign a contract you must abide by
Pros of Buying:
- Build wealth
- Invest in your future
- Privacy

- Can make your home your own without a landlord’s approval

Cons of Buying:

- More responsibility
- Property taxes
- Much more expensive than renting
- Possibility of losing value on your property rather than gaining it

Joe, one of Sherry’s clients and a first-time home buyer, recently said, “At the end of the day, it made more financial sense to invest in a home than to sink thousands into an apartment that doesn’t build equity.” Joe was in a position where he had rented for years and was financially secure and ready to invest in not only a home, but in his future. While the decision to buy and to settle into a home makes sense for some, it may not for others. 
First-time home buyers Tiffany and David have rented in various towns around the state. David, 31, had been renting his entire adult life, and he was “sick of throwing money away.” While renting offers you freedom and is an easy option, an apartment or town home doesn’t build equity.

When considering what is “better” or whether you should rent or buy, it is definitely an individual decision. Keller Williams Realtor Sherry Knutson said, “For some, renting simply better fits their lifestyle or work situation.” On the other side of things, some may be ready to settle down, to build equity and acquire wealth. “If their main concern is to build wealth and make a wise financial decision, buying is the way to go.”

If your goal is to eventually own a home, there is no better time than now!