Pro's and Con's of Buying vs. Renting

If you are considering buying a house, one of the first decisions you need to make is whether buying a house instead of renting one is the right direction for you. Since owning a home is the "American Dream", many people simply assume that it's always to their advantage to buy a home, and for most, it is. Take a moment to review the following lists to see how your situation fits in.

Renting

• More fixed costs for the term of the lease
• Not gaining equity, but not losing it either
• When the lease is up, you can just move
• There is generally less work in maintaining a home or apartment
• Smaller amount of "up-front" cash
• No matter what happens with the value of the home, you will never gain equity
• Limited - or no - ability to personalize your living quarters
• No tax advantage to renting. Your landlord gets any and all tax breaks that are available

Buying

• Variable costs
• Equity may go up, down, or stay stagnant
• If you want to move, home generally must be sold
• Work needs to be done by you - or paid for by you
• Generally a larger initial investment - the downpayment
• Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase
• The ability to remodel and redecorate the home to match your needs and desires
• There can be tax advantages attached to home ownership. Consult competant legal and/or accounting advice for details for your situation

courtesy of Our Family Place