Renting vs. Buying: Pros and Cons

Let's keep in mind that the costs associated with renting vs. buying depend heavily on where you live and the local housing market. But here are some helpful pros and cons to help you make a final choice.

BUYING

PROS

• May build equity that could be accessible through home equity products

• No landlord to answer to

• More stability (especially with schools)

• Possible tax benefits

• Can improve or upgrade home to your taste

CONS

• Requires substantial money, paperwork upfront

• Could lose money if home values decline

• Extra expenses beyond mortgage payments

• Rising home prices and low inventory in many markets

• Responsible for repairs, remodeling

RENTING

PROS

• Fewer upfront costs and paperwork

• Freedom to be more mobile

• Not responsible for maintenance, repairs

• No need to worry about falling home values

• Builds credit (if your landlord reports rent payments to the credit bureaus)

• No property tax bills

CONS

• Landlord could raise rent

• Might have to relocate on short notice if the landlord decides to sell the property

• Builds equity for the landlord

• Limited vacancies in competitive rental markets

• No tax benefits

• Less freedom in design choices (paint colors, appliances)

Source: Bankrate.com