Renting vs Owning a Home: What You Need to Know

By Ashley-Victoria Smith

The pros and cons of renting instead of owning a home

For generations our parents, investors, and financial experts have told us to consider buying a home as it builds “long-term wealth”, “tax benefits”, and “freedom” to name a few ownership perks but with the cost of living these days and the rise of nomad and remote living, the change in our economy, and the availability of houses today, is it still worth it?

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We sat down with Certified Luxury Home Marketing Specialist, Terry DeMonaco of Coldwell Banker Realty to address the top three pros and cons of renting vs owning a home. Here is the advise she had for us and things to consider before making your next move!

Pros of renting instead of owning a home:

1. Flexibility and mobility

Renters can more easily relocate without the need of having to sell a home, affording them much more flexibility in time and expense.

2. Lower Upfront cost

Renters typically pay the first and last month’s rent plus a security deposit which might be a pretty good chunk of money but nothing compared to buying. Homeowners have all the expenses associated with closing costs, such as down payment, homeowners insurance, property taxes, etc.

3. Reduced Financial Risk

Renting can be a safer option in volatile housing markets, as you are not tied to the potential fluctuations in property values that homeowners might experience. The stress of a changing market can be a lot when you are a new homeowner.

Should you buy a home? The breakdown of renting vs owning a home

Cons of renting instead of owning a home:

1. Loss of Equity

When you rent, the money you pay goes to the owner and it does not contribute to building your own wealth. This can be a disadvantage for long-term financial stability and asset ownership as you are not inverting that money in any way.

2. Rent Fluctuations

You have no control over rent increases and in high-demand areas, they can be substantial. If the homeowner’s insurance increases or Homeowner Association fees increase, landlords can pass these increases onto the renter causing financial unpredictability.

3. Limited control over space

As a renter, you typically have limited ability to make modifications to the space. Even if the landlord allows it, you are paying for changes to a property you don’t own. You are also limited in having pets and the wear and tear they can cause.

Perhaps at the end of the day, there’s not a right or wrong answer for renting vs owning a home. For some it could just be a lifestyle choice, maybe they don’t want to have their hands tied in a 20+ year mortgage or have to deal with the responsibilities that come with being a homeowner. Things like property taxes, HOA fees, or simply replacing the water heater certainly aren’t fun but there is always an upside and a downside!

The comparisons on renting vs owning a home

Ashley-Victoria Smith

Serial entrepreneur, celebrity publicist, published author, swimwear designer, and creative director. Currently resides in the Queen City with her two rescue fur babies indulging in coffee, a good book, and Marvel movies.