Everyone has, at some point, considered buying or renting a home. The reasons could be starting a family, living in a temporary home until you find your dream house, or becoming their first income-producing asset. However, in the last few months, home-buying demand has skyrocketed, along with the purchase of a home. Choosing to rent or buy a home is a decision that can affect the individual’s lifestyle.


The American Dream created a perception that ownership equals wealth and fulfillment of that dream; however, that is not the case. Owning a home isn’t always a better option than renting. Before you consider renting or purchasing a property, consider the pros and cons of renting versus buying a home. After reviewing the pros and cons, you can decide which option fits your financial situation.



Renting a home is an agreement between a landlord or property manager and a tenant, where the tenant agrees to pay a monthly payment in exchange for living in the property. Renting has always been seen as a waste of money; however, everyone needs somewhere to live. When a person rents, you know the monthly fixed cost of living in this property. However, if you are buying a home, the cost can be considered a variable cost because in one month, you may only be paying the mortgage, and the following month can be the mortgage and costs to repair something in your home. Furthermore, renters must deal with unexpected rent increases every year because that is the time when the lease agreement is up for renewal. However, buying a home will never increase your mortgage payments except for property taxes and insurance since those will increase. Finally, renting a house means landlords will care for repairs and maintenance.


Expenses to consider that will come with renting a home: 

  • Monthly rent
  • Parking fees
  • Renter’s insurance
  • Laundry
  • Pet fees



Owning a home is a milestone everyone wants to achieve before their early 30s or sooner. Although making this big purchase has benefits, there are heavy costs associated with the home you decide to purchase. Unlike renters, homeowners can make long-term investments in their property, which appreciates the home value over time. Also, homeowners can have tax benefits, including deductions on mortgage interest payments and other homeowner expenses. Finally, homeowners can create passive income on their homes by renting them out to tenants. Buying a home will allow the homeowner to build wealth by purchasing future homes and increasing net worth. Finally, being mortgage-free can lower your overall living expenses since you will be the proud owner of your home.

Expenses to consider that will come with homeownership: 

  • Mortgage (Principal plus interest)
  • Property Taxes
  • Repairs
  • Insurance (Home, earthquake, or flood).
  • Tree trimming


After reading these considerations, many of you will still want to buy a home. However, an individual should consider whether their financial situation would allow them to afford a home and cover the costs associated with homeownership. Although renting a home isn’t permanent, you should consider renting a short-term option. Still not convinced about the costs? Consider visiting the calculator NerdWallet has created for anyone to calculate the tradeoff between buying and renting a home.