House Renting vs. Buying: Pros and Cons

House Renting vs. Buying: Pros and Cons

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It’s the age-old question — should I rent a house or buy a house? The reality is, there is no right or wrong answer. Individual circumstances will play a factor, as will economic conditions. There are both pros and cons to renting or buying, so weighing your choices carefully becomes a priority.

Key takeaways

  • Pros of renting: cheaper in some areas, flexible, fixed expenses.
  • Cons of renting: rent not an investment, rent can increase, limited customization.
  • Pros of owning: build equity, tax benefits, customize property.
  • Cons of owning: long-term commitment, expensive maintenance, not ideal for frequent moves.

Pros of renting a house

There are some circumstances where it just makes sense to rent a home versus buying one. Those who live in high-cost areas or have careers that force them to relocate frequently are some of those who may benefit from renting. Let’s take a closer look at the pros and cons of renting a house.


rent vs buying pros and cons


Cheaper in some areas

In some areas, especially in certain major cities, the question of renting vs buying comes down to the cost of the location. For many major cities, renting is the cheaper option. Cities that top the list as some of the most expensive cities to live in are located in the western half of the country. Chicago, Portland, and L.A., with the largest gap in the country seen in San Francisco, are all places where it is cheaper to rent than it is to buy. According to Forbes, a buyer would have to spend 79.68% of the median income on housing payments, while a renter would spend only 35.66%.


Cheaper in certain situations

When purchasing a home, an important consideration is that an owner will not see an ROI for approximately five years after purchase. If you plan on moving within a few years, you could lose money simply by paying down mortgage interest without gaining equity in the home. This would be in addition to added expenses such as property tax, purchasing fees, and home repairs. If moving too soon, these expenses would be a dead loss to the buyer.



One of the most significant benefits of rental is the flexibility it offers. Those who frequently move for work or their lifestyle may not want to be bogged down with the extra expenses and difficulty of homeownership when going from place to place, especially if they won’t have time to build equity (remember the 5-year rule).


Fixed expenses with no surprise fees

Unlike owning a home, the maintenance of a rental is not the renter’s responsibility. Home upkeep can be a prohibitive expense and is a minefield of surprise repairs and structural emergencies. Monthly budgeting is simpler and more consistent when not having to factor in maintenance fees or extra taxes.


Cons of renting a house

Every pro list needs a con lineup to compare it to, so that’s just what we did for you. Let’s take a look at a few cons to renting a house.


Rent is an expense

Rent is a pure expense, not an investment. When paying a mortgage, you pay into the property, which gradually builds equity. Equity is the amount that is owned free and clear and will increase over 15 to 30 years until the home is owned outright. Rent pays for the privilege of living in a house on a monthly basis, and nothing more.


Rent can increase

While a rental price may look good at the onset, remember that rent can increase at the whim of the property owner. A mortgage remains steady, with the added benefit of improving your credit score if paid promptly.


No tax benefits

Renting a house does not offer tax benefits. Interest on a mortgage can be claimed as an expense in the yearly tax file, reducing your overall tax bill.


Cannot customize property

An important consideration when deciding between home rental and ownership is the ability to customize. A renter is not free to change any aspect of the property without express permission from the property owner. This includes the choice of paint color, plantings, or any structural changes. For those who want their home to reflect their own stylistic choices, homeownership may be a better choice.


Pros and cons of owning a house

Owning a home is both a commitment and an investment. It’s difficult to give a quick answer to the complex question of, “Should I buy a house or rent?” A better choice is to analyze the major factors of homeownership and ultimately decide if renting or buying a house is best for your personal income and lifestyle.


The need for mobility in a chosen career

An important element to factor into the rent versus buy equation is your career path. Is it likely that you’ll be staying in one area for a long time? Is your company based in one city, or is it a possibility that you might be moved to another office? Is employment steady in your field? If there are many questions surrounding your ability to stay rooted in one place for a period of time, a rental might be a better option. You need time to build equity and allow for a move, which is not always a quick and easy process.


A personal need to settle down or to be able to move freely

In that same vein, those who are not ready to settle into a specific place for long may not be the best candidate for homeownership. If moving about freely is a must, rental is a more practical solution. A mobile lifestyle is not the best match for homeownership, which requires stability. Remember that there is no ROI on owning a home for approximately five years after purchase, so frequent moves are not financially savvy with a home purchase.


Long-term economic development in the area

Before committing to homeownership, be sure to take a look at long-term trends in economic development for your area. Whether your home will appreciate or depreciate in value depends directly on the property it sits. Careful research is necessary to avoid financial mishaps. If you are unsure of a particular area, renting is the safest option.


Contact us today!

Owning a home is considered the ultimate American dream, but sometimes it just makes sense to wait and continue renting. If you have been renting and you’re ready to stop paying someone else’s mortgage, reach out to a Hero Home Programs™ representative. Their experienced home buying experts will help you find the perfect realtor and lender for your needs. They can also help you find grants in your area and special housing partners. Their goal is to save you as much money as possible while helping you achieve your dream of homeownership.

Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

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