Owning -V- Renting

Rent Advantages

May be cheaper than a mortgage payment
Fewer (if any) maintenance costs
No down payment required (less deposit)
No real estate taxes (renters insurance optional)
Less stress (who cares, it’s not yours!)
Freedom to move or downsize when necessary
No risk of home price depreciation
Some utility bills may be included
“Free” amenities such as pool, gym, security
Money can be used for other, more profitable investments
Can’t be foreclosed on

Rent Advantages

Rental payment may exceed monthly cost of mortgage
No ownership or wealth creation
Payments never stop when renting
Rent will rise over time
Must deal with a landlord or management company
No tax benefits Rules, regulations, and limitations
More temporary, less stability
Always at the mercy of the property owner Pets may not be allowed

Ownership Advantages


You can build home equity and wealth
Status- Status-Status
Sizable tax deductions possible
Your space, your rules (pets welcome)
Ability to remodel, expand, tear down
Pride of ownership (social status, accomplishment)
Potentially better for children, family structure
Mortgage can improve your credit history/score
Ability to borrow against your home (HELOC or cash-out)
No more monthly payments once mortgage paid off
Fixed payments (if you choose a fixed mortgage)
Mortgages are the cheapest loans available
No landlord
Can exclude capital gains when you sell (partially)
Inflation hedge
Ca rent out to others
Can sell and use proceeds for bigger/better home
Retirement nest egg
It’s the American Dream!

Ownership Disadvantages

Home prices may lose value
Could overpay for your property
Obtaining a mortgage (and finding a home) is a hassle
Not everyone qualifies for a mortgage
You must pay taxes and homeowners insurance
Total housing payment can be more expensive
Mortgage payment can rise (if an ARM)
Sizable down payment necessary
Maintenance costs can be excessive
Pricey HOA dues (if applicable)
You’re “stuck” in a home (long-term commitment)
Increased liability and responsibility
Transactional costs of buying and selling
Ownership is stressful!
Taxes and insurance generally rise
Your home can be damaged or destroyed (and not fully insured)
Can be foreclosed on and lose your home