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How to Decide Whether to Rent or Buy a Home

Updated on February 12, 2019
Deborah-Diane profile image

Deborah is the author of the Baby-Boomer-Retirement. com blog and writes about topics of importance to retirees and Baby Boomers.

There Are Pros and Cons of Renting vs. Buying

Should you rent or buy?  The decision can be complicated.  There are advantages and disadvantages to both choices.
Should you rent or buy? The decision can be complicated. There are advantages and disadvantages to both choices. | Source

Making Lifestyle Decisions

One of the more difficult decisions you may have to make in the coming years is whether it is financially wiser for you to rent or buy your next home. There is no one answer which is right for every person in every situation.

After more than a decade as a Realtor, I learned that not everyone will be happy owning a home. For some it could become a financial hardship. For others, the amount of work involved would be discouraging. There are also other reasons why some people are better off not buying a home. Below are some important considerations which will help you make the right decision for yourself.

For example, do you enjoy yard work? Do you look forward to puttering around your own home, planting flowers, hanging curtains, decorating and fixing it up? Or, do you hate the idea of mowing the lawn and worry that maintenance costs could eat up too much of your budget? Would you be satisfied buying a condo rather than a house, or would you prefer not to have much responsibility for it at all?

How much are the rents in your area verses the amount of the typical house payment? How long do you plan to stay in the residence?

The answers to the above questions are just the beginning of the things you should consider before deciding whether you would be better off buying or renting your residence.

How Often Do You Move?

Do you work for a company which will probably transfer you in a year or two? Do you look on this residence as temporary? Think about how long you expect to be in this home. During the years from 2008 through 2012, real estate prices dropped in many areas of the United States. Since then, real estate prices have come back quite dramatically in some parts of the country, but not everywhere. Even in the locations where prices have rebounded, those kinds of returns are unusual and often do not last. In a normal real estate market, the value of a home typically goes up about 1% to 2% a year, with the exception of a few really high priced areas, such as New York, Boston, Chicago, San Francisco and Los Angeles.

If you live in a typical suburban or rural community and only plan to stay in your home a couple of years, most of time the increase in value will not be great enough to cover your selling costs. You could end up losing all or some of the equity in your home. Unless you plan to stay in one place for at least 4 or 5 years, and you are able and willing to ride out any future downturns in the market, you are probably better off renting.

Here's A Book to Help You Understand Rent vs. Buy

Rent vs. Own: A Real Estate Reality Check for Navigating Booms, Busts, and Bad Advice
Rent vs. Own: A Real Estate Reality Check for Navigating Booms, Busts, and Bad Advice
There are many factors to consider before buying a home. When discussing this issue with my real estate clients, I found that the checklist contained in this book was very helpful.

House Payments vs. Rent Payments

Another consideration is how much you want to spend on housing each month. If you own a house, you will have to make mortgage payments and pay property taxes, homeowner’s insurance, maintenance expenses, and possibly a homeowner’s association fee. How much would your rent be for the same property? If the rent is substantially less, then the amount you might save from taking the mortgage interest and real estate tax deductions on your income taxes may not be enough to make it worthwhile to own, unless you expect to live there so long that you are sure you will build up a lot of equity.

I have known people who were able to rent a home for about half what it would cost to make payments on the same type of house. For those people, it was often worth it to rent rather than own. In addition, they did not have to tie up $40,000 to $100,000 in order to have a 20% down payment on the house. (This is the amount that would be required to put 20% down on a $200,000 to $500,000 home. More expensive homes would require even more money that would be tied up in a down payment.)

People need to look at whether or not they would be better off investing their down-payment money and making low rent payments which allow them to build up their savings. That can certainly be a wise option for many people.

In addition, the tax savings may not benefit you if you buy a low-cost home or condo. In some cases, the standard tax deduction allowance is as large as the real estate taxes. It might be worth it to have a talk with your income tax preparer before you decide if it would be worth it to you to buy a home.

Are You a Better Renter or Owner?

There are other things you will want to consider before you decide whether you should rent or own. For example, are you a good renter? Are you willing to take good care of someone else’s property? Are you willing to fix things if you break them, or pay to get them fixed?

On the other hand, do you want the freedom to redecorate or paint your home however you want? Do you like to have lots of pets? If you think that renting does not allow you enough freedom to live the way you want to live, then buying your own home may be the smart decision.

However, if you do not want to be responsible for any repairs on your property, and you do not want the financial responsibility if something goes wrong, then you might be a better off renting a home.

As you can see, there is no simple, definitive answer to the question of whether it is better to rent or own a home. You have to make the decision based on your own lifestyle, personality and financial situation. With a little careful consideration, however, you should have no problem deciding what is best for you!

Voice your opinion about Renting vs Buying:

Do you think you are better off renting or buying your next residence?

See results

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2011 Deborah-Diane


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    • Deborah-Diane profile imageAUTHOR


      5 years ago from Orange County, California

      Renting can me more affordable and less stressful for many people; owning can bring a certain amount of financial security to others. There are things everyone needs to consider before deciding what is best for them.

    • ezzly profile image


      5 years ago

      Thanks for this Deborah Diane, we are renting and our land lady is best friends with our neighbor , needless to say we end up doing a lot of our neighbors work such as mowing her lawn or taking out her trash to please the land lady :/

    • Deborah-Diane profile imageAUTHOR


      6 years ago from Orange County, California

      Renting can be the best choice for many people, although not for everyone. This article will help you decide which choice is best for you!

    • Deborah-Diane profile imageAUTHOR


      7 years ago from Orange County, California

      Yes, I have heard of other people who feel there is a stigma to renting, especially in affluent areas. I had a friend whose husband was a very highly paid executive with a company. When they rented a house for a year, the neighbors barely spoke to them and never invited them to anything. They were shocked by how rude everyone was in their new neighborhood. At the end of the year, he accepted a job with another company in another part of the country and they moved. What a loss to that neighborhood.

      I hope that people will realize that there is nothing wrong with being a renter. Sometimes it makes the most economic sense. By the way, the home that Michael Jackson was living in when he died was RENTED!

    • profile image


      7 years ago

      I worked for a top Realtor in Michigan for years. Executives were always being transferred in and out. Renting a home was a relatively normal thing to do. Even if they planned to stay, they would rent for a year and get a better feel for the area.

      When my husband accepted a position in Western New York, we knew it was a 1 year deal, so we rented a home. We have 3 kids, 2 dogs and 1 cat; we can't go and get a 2 bedroom apartment. It doesn't suit the size of our family or our lifestyle. Apparently it is VERY strange here! Several neighbors have said, "Oh .... you're the renters..." as if it is such a bad thing. And, I have been asked if I "... just pick up and move across the country every year ..." like I am some vagrant.

      We live in an affluent area and pay a mint to rent this house. I just never realized how much of a stigma renting could be in other parts of the country.

    • Deborah-Diane profile imageAUTHOR


      7 years ago from Orange County, California

      It is difficult to deal with home ownership as we get older. It can be very stressful, especially when things go wrong or need to be repaired. I think many retired people appreciate being able to just call someone else to take care of problems when they arise.

    • JayeWisdom profile image

      Jaye Denman 

      7 years ago from Deep South, USA

      I'm pushing 70 and in a house that's too large for me to clean and too expensive to maintain. The only reason it's not already on the market is because real estate in my area is still in a slump. I don't want to lose my entire equity, so I'm trying to wait until (hopefully) the market improves. At some point, I may have to cut my losses, though I hope it doesn't come to that. I am ready to rent and let someone else take care of maintenance!

      Voted Up++


    • moonlake profile image


      7 years ago from America

      Came back to share this hub. It's very interesting and worth sharing.

    • Deborah-Diane profile imageAUTHOR


      7 years ago from Orange County, California

      I recently read that 85% of senior citizens (I don't recall the exact age) are renters. My husband and I sold our last home a couple of years ago and are currently renting one we like even better. Since I am in my mid-60's and my husband is almost 70, we have been wondering if we should even consider buying another home and have to deal with maintenance, repairs, upkeep and everything else. It is a thought-provoking issue.

    • profile image


      7 years ago

      We rent and are thankful we don't have to keep up with maintenance costs! God bless, Susieq42

    • moonlake profile image


      7 years ago from America

      I always hated renting. We were good renters took care of the places we lived in but we just didn't like it. I know there comes a time when everyone has to decide to keep their home or move into something easier to handle. Voted up.

    • Deborah-Diane profile imageAUTHOR


      7 years ago from Orange County, California

      I understand that it can be a tough choice. We are living in a rental house at the moment. If we owned it, our payments would be at least twice what the rent is. In addition, by renting, we don't have to worry about repairs and maintenance costs. I know that we are not building equity. On the other hand, we lost all our equity on the last house we owned due to the collapse in the real estate market. It has made us a little hesitant to buy again.

    • mary615 profile image

      Mary Hyatt 

      7 years ago from Florida

      I am in the process of making a decision whether or sell or rent out my house. I wrote a Hub about that. If I had my time to go over, I would never buy a house, I would be a renter. Houses are just too much responsibility.

      Good info here. I voted UP, etc.

    • Azure11 profile image

      Marian L 

      9 years ago from UK

      It can be a tough choice to try and decide whether to rent or buy and it does seem like more people are renting these days as buying a home becomes more of a liability but I for one like to have a home that I can decorate to my choice and call home :-)

    • nikitha p profile image

      nikitha p 

      9 years ago from India

      Great hub, thanks for sharing this.

    • Deborah-Diane profile imageAUTHOR


      9 years ago from Orange County, California

      I understand why you wouldn't want the extra expense of renters insurance. However, at least it is much cheaper than homeowner's insurance!

    • SweetiePie profile image


      9 years ago from Southern California, USA

      I enjoy renting, but now we have to pay renter's insurance. I wish that was only an option because to be honest, I have never had to use it, and it really does not cover much anyway.

    • Deborah-Diane profile imageAUTHOR


      9 years ago from Orange County, California

      Thank you for your comments on renting vs buying a home. It can be a tough decision.

    • stars439 profile image


      9 years ago from Louisiana, The Magnolia and Pelican State.

      A wonderful hub pointing out the advantages of both choices. God Bless You Dear Heart.

    • DeborahFantasia profile image


      9 years ago from Italy

      Very informative !

    • lovesleftovers profile image


      9 years ago from Texas

      Very timely information Diane! So many Americans are looking for ways to save money and cut down on home maintenance responsibilities. Great job of looking at things from both sides :)

    • Jimmy Evola profile image

      Jimmy Evola 

      9 years ago from Australia

      Greatpiece, even though it seems par for course it really can be quite a job having to maintain a property

    • profile image


      9 years ago

      We rent our house from my son (see my hub, Nows the time to invest in Real Estate) and we are very happy. We don't have to put a lot of time and money into maintaining our house. My son's just a phone call away! We have just enough work to do to keep us happy...yard work, my flower bed, etc. No taxes, no insurance.


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