Buying a home costs quite a bit of money. In fact, many people rent to save money. But does renting really save you cash in the long run? Is it as beneficial to your wallet as you think it is? Here we take a closer look at the benefits of each option, and the extra costs that come along with them to determine if there really is a winner in the war between buying vs renting.

Pros of Buying

With the rising cost of living, it is now almost always cheaper to buy a home than it is to rent one. Unfortunately, the sad truth is that the high rent prices make it difficult to save for a down payment, even in the areas where buying a home is the cheaper option.

If you are lucky enough to get together enough money for a down payment, there are many pros to buying a home as opposed to continually renting.

  1. It saves you money. You probably won’t be technically saving a ton of money, but you will be investing in something that is your own, rather than throwing money into a rented apartment or home that belongs to someone else. Actually, buying tends to be cheaper in the long run in many cities.
  2. Owning a home bring a feeling of security. Rent inflation will have to effect on you. Since the home is already yours, you won’t feel the pinch the next time rent prices rise.
  3. A home is tax advantage. Many aspects of buying a home are tax deductible is many states.  Depending on where you live, portions or even all of your interest and real estate tax on your mortgage payments can be tax deductible.
  4. It is also an investment. A home is a huge thing to have ownership of. It is more of a long-term investment than just some place to live. A home also has a high monetary value and provides you with assets for your future.
  5. Owning a home also helps your credit. Already having a home loan in good standing will help you if you ever need to apply for another loan. You can also build up your home equity and borrow against it in the future if you need to.
  6. You have the freedom to do what you want with the home. When you are renting, you always have to abide by someone else’s rules. Want to paint your walls yellow or build a small garden? Well, you better your landlord’s approval first. When you are the homeowner, you are free to make changes as you wish.

Extra Costs with Buying

There are many benefits of buying a home, especially if you can scrounge up the down payment. However, owning a home does not come without its extra costs. Here are some of the additional costs that some renters do not consider when thinking about buying a home.

  1. Utilities. When you rent, you often have the luxury of having your landlord cover some or all of the utilities. When you own, you no longer have this benefit. Any and all bills become solely yours.
  2. Appliances. Like utilities, these are no longer provided for. Some appliances will come with your home, especially if you buy a newer model home. But the appliances that are missing or need repairs are your responsibility now.
  3. Insurance. If you own a home, you need to have homeowner’s insurance. Premiums vary depending on where you live, and also by the age, size and type of your home. For example, older homes may come with a higher premium due to the fact that they may need repairs sooner than later. Homes in flood and hurricane prone areas are also subject to higher insurance premiums.
  4. Taxes. Property taxes are another additional cost that must be paid. Property taxes are based on the taxes in your area as well as the value of the home you own. The higher in value your home is, the more property taxes you will need to pay

Pros of Renting

Just as there are pros to buying a home, there are also pros to renting. Buying may not be for everyone, and here are some of the advantages of renting your living quarters rather than buying.

  1. It can save you money. Again, this depends on where you live. Many cities have low home prices, but add in the cost of insurance, taxes and maintenance fees, and the monthly payments come out more than the cost of rent.
  2. Renting gives you more options. If you are a fly by the seat of your pants type of person, renting may be the better option for you. Renting provides you with a slew of living options. It also gives you the chance to figure out if you like townhouses, condos or traditional homes best.
  3. It is less of a commitment. Renting gives you the flexibility you need to pick up and move if you choose to.
  4. Less excess costs. As pointed out before, buying a home brings extra costs like homeowner’s insurance and other fees.

Extra Costs with Renting

There have to be extra costs with renting too right? Of course there is. The extra costs are often minimal, but more than renters expect to pay.

  1. Storage. Renting often means a smaller space. For those who used to be home owners, or even those who accumulate tons of stuff, having adequate storage space is an issue. For these people, an extra storage locker is a must. Outside storage fees range depending on how big a space you need.
  2. Parking. In some overcrowded rental areas, finding parking is a dog-eat-dog type of situation. For families with more than one car, finding an extra parking space is difficult. And then there are the fees associated with an extra parking space that can go up to $100 a month or more.
  3. Insurance. While renters aren’t subject to homeowner’s insurance, they can opt to buy renter’s insurance to protect their assets. In addition, some landlords actually require renters to purchase their own renter’s insurance. This protects the renter in the event that someone gets hurt, and also protects the landlord from having to dish out money for accidents or break-ins that happen on their property.

As you can clearly see, there are pros to both owning a home and renting. There are also added costs with each. When making the decision to buy or rent, take a close look at your finances and your lifestyle before deciding which is best for you.


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