Renting vs. buying a home: A comparison

Renting vs. buying a home: A comparison

BUYING

Advantages

  • May build equity and credit
  • No landlord to answer to
  • More stability (especially with schools)
  • Possible tax benefits
  • Can improve or upgrade home to your taste

Disadvantages

  • Requires substantial money and paperwork up front
  • Could lose money if home values decline
  • Extra expenses beyond mortgage payments
  • Rising home prices and low inventory in many markets
  • Responsible for repairs and remodeling

RENTING

Advantages

  • Fewer upfront costs and paperwork
  • Freedom to be more mobile
  • Not responsible for maintenance, repairs
  • No need to worry about falling home values
  • Build credit (if your landlord reports rent payments to the credit bureaus)
  • No property tax bills

Disadvantages

  • Landlord can raise rent or sell the property
  • Choices may be limited depending on vacancies
  • Might have to move multiple times
  • Don’t build equity
  • No tax benefits
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