Should You Buy or Rent a House?

When your lifestyle requirements necessitate moving to a house, you will face a tough decision: should you buy or rent a house? There is no one-size-fits-all answer to this question. It depends upon your personal circumstances.

Pros and Cons of Buying Versus Renting

Initially, you should evaluate your living situation, including an assessment of your short and long-term needs. Consider both your lifestyle and finances.

Some people believe that buying a house is preferable because, as you pay off your mortgage, you gain equity (the difference between the market value of a property and the claims held against it). You can take out a loan against this amount. In addition, the money you spent in mortgage payments is recovered when you sell the house. As a renter, the money you paid in rent is lost because you have nothing to show for it when you move out.

An important consideration in owning a house is upkeep. The size, age and type of house will determine your maintenance costs. Unlike living in a rental property, buying a house is an investment. Proper maintenance and updates are necessary to maintain your house’s value.

When you own a house, you (not a landlord) are responsible for bearing the cost of maintenance, repairs and updates. This includes caring for a yard, the house’s interior and exterior, appliances and systems (i.e. heating, air conditioning, plumbing and electrical wiring). In an older house, especially one that hasn’t been well maintained, the cost of maintenance could be high.

Before purchasing, you should have the house inspected to identify problems needing attention, and ascertain whether you can afford the necessary work. A lifestyle comprised of long work hours, or care of young children, may prevent you from making the time commitment necessary to maintain the house and yard yourself. Hiring home service providers is an option, but doing so will add to your overall living expenses.

Of course, if you decide to rent a house, your landlord will be responsible for repairs and most of the maintenance. Your lease will outline which tasks each of you is responsible for. Read it carefully, because if you are required to do a lot of maintenance for a house don’t own, you may not be getting a good value for your money.

Which Option Is Right for You?

The amount of time and money you can afford to spend, beyond the rent, will factor in to determining which option is best for you. Another factor to consider is your time frame. Going to graduate school or taking a job lasting from six months to two years could influence your decision. In that scenario, you may not live in the area long-term. A nice house, with maintenance included in your rent, may make renting a better short-term option. By weighing these factors, along with your unique situation, you will be able to make a decision customized to your needs.

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Lisa Bernstein: As a long-time apartment dweller and seasoned condominium trustee, I have dealt with numerous landlord-tenant, property management, and day-to-day apartment complex issues. My extensive, direct experience has led to invaluable insights into apartment life from both the tenant and management perspectives.