Buying vs Renting – Which is Best for you?

May 5th, 2014  |  Home Insurance

The modern landscape and current economy has changed the way that people approach housing. No longer is homeownership for everyone, begging the question – Is home ownership for you?

The answer to this question is not that cut and dry and there are many variables in play beyond your current financial situation. This is why it’s important to compare your options before reaching a final decision and deciding between renting and buying a place to live.

Buying vs. Renting – A Comparison

Here are 5 core factors that should be part of your decision making process when determining whether to buy or to rent:

1. Cost: This is perhaps the biggest factor when it comes to making a decision about buying or renting. In general, renting is the cheaper option. Your rent is a fixed price and you do not need to save a down payment for a rental. When you buy, even though your mortgage payment might be comparable to renting, you also have to factor in additional costs such as your down payment, property taxes, condo fees (if applicable) and other costs associated with home ownership. 
2. Investment: When you rent, your money goes to the property owner. When you own, you are making an investment and are building equity as you pay off your mortgage. 
3. Property Maintenance: When you rent, property maintenance is the responsibility of the property owner, when you own, you are responsible for the upkeep of your property.
4. Location: Renters tend to live in city centers, especially in larger cities, potentially eliminating the need for a car and eliminating a commute to work. When you buy a home, they tend to be located in the suburbs or on the outer areas of the city, requiring a commute to get to work.
5. Flexibility: Renting provides you with great flexibility, especially if you are living month to month. This is ideal for young professionals that may switch jobs or experience changes in their personal life. When you own a property, it will be more difficult to move because you will need to sell your home.

Do you currently rent or buy? What factors have influenced your decision to live in a rental or become a homeowner?