Whether you choose to rent or buy a home the place in which you live is a major decision. Renting or buying plays a significant role in how much money you save; it affects your lifestyle and has an impact on the finances accumulated over time. Buying a home and setting down roots are one of the biggest accomplishments for everyday people because they see owning a home as an investment and a source of tax deductions.
Likewise, many individuals rent homes for the flexibility and the convenience of minimal responsibility, even though renters amass a substantial net worth with time if they purchased a house.
| Buying | Renting | ||
| Pros | Cons | Pros | Cons |
| Payments build equity | Lots of costs | Cheaper payment | Rents will keep rising |
| Might be tax deductible | More responsibility | No taxes or maintenance | No wealth creation |
| Forced savings | Home prices may go down | No down payment required | No tax benefits |
| Stability: don’t have to leave! | Harder to move | Easier to move | Less stability and more rules.
|
In the end renting or buying is not a decision that should be solely based on finances; it should also be based on your life’s vision. Monthly mortgage payments and renting may be similar have payments, so ignore those who argue owning makes sense in the long run or that paying rent is the same as mortgage payments. The real estate market and the life’s everyday situations are too diverse to make bold statements like these.