Owning vs. Renting a Property

People always ask the question:

“Is it better to own or rent?”

My answer is always the same…

It depends on your specific circumstances and personal preferences.

RENTING

First of all, not everyone is ready to buy a piece of property. I know what you are thinking, it is not just for financial reasons. Financial circumstances are just one of the many reasons someone might not be ready or willing to buy a home. There are numerous reasons why a person may choose to rent including but not limited to:

1. They are new to the area and prefer to rent for a year to get a feel for the neighborhood.

2. They may have moved to the area for a job that relocates it’s employees regularly thus making it difficult to buy a home.

3. They prefer the convenience and amenities that certain condos may offer without the hassle of being responsible for repairs or maintenance.

4. They may not have enough saved up for the deposit and closing costs and are renting in the meanwhile.

5. They may not know they are qualified to buy a home because they never checked.

Like these 5 reasons, there are dozens more that could justify or explain why we see so many renters. A young newlywed couple could simply not be financially ready to take on the commitment that comes with buying a new home. And so on and so forth.

OWNING

Home and property owners will for the most part tell you they’d choose owning over renting.

1. They like the fact that they own the property and aren’t subjected to being forced to move or allow someone to make changes or sell the property jeopardizing their living situation.

2. The tax incentives to owning your home can be sizable when it comes time to file your taxes.

3. Stability for raising a family. Many parents prefer to own and allow their children to go to local schools around their home that they may not be zoned for if they are forced to move every few years.

4. Building wealth through the property value and equity.

We could go on and on naming reasons to own but renters find plenty of reasons to avoid taking the leap to homeownership including:

1. The hassle of having to fix it if it broke vs calling the landlord… you are the landlord.

2. Having to maintain the yard and landscaping to keep your curb appeal looking good and your property values up.

3. Taxes… no need to elaborate on that one.

4. HOA fees and assessments.

5. High insurance premiums and requirements such as flood insurance, etc.

OWN or RENT?

Ultimately it is a question that each person must answer for themselves. Taking into account your specific details an circumstances along with your personal preferences will allow you to answer this question for yourself.

However, if we are solely talking financially, personally I’d say it is better to own. You are paying into a property either way but when you own, you are building wealth and gaining equity in your home. Renting does the same but for someone else. That’s my two cents on the matter.