Renting and owning homes are two very different concepts of living. Renting and buying aren’t fundamentally good or bad and what it really comes down to is crunching numbers, weighing the pros and cons for yourself, and being realistic about your finances. Learning all you can about the home buying process can also be a big help in your deciding factor, so consider a Homebuyer Education Class as part of your research. When you buy a home, you pay for things you don’t have to pay for as a renter: loan interest, property taxes, insurance, and even maintenance and repair costs. And as a renter, you may not have some of the flexibility that a homeowner might have. You need to look at things within your own personal situations but here are just a few of the main pros and cons of buying and renting. 

Pros of Renting: 

• Low maintenance. Usually, it is the landlord’s responsibility when something goes wrong at a renter’s home. Be sure you read the lease carefully before signing so you don’t end up paying for repairs or other things that you might not consider. 
• Mobility. If you move around a lot, renting might be a good option for you. You can move around all you want without the struggles of keeping up with a home you own. 
• Smaller costs. Renting payments are generally lower than mortgage payments. Renting can actually save you hundreds and possibly thousands each year. Buying comes with more out of pocket costs such as mortgages, interest and property taxes, homeowner’s insurance, flood insurance, and possibly condominium or association fees. 

Cons of Renting:

• No remodeling. Usually, renters are not allowed to make drastic changes to homes they are living at, unless they get their landlord’s permission. Some landlords will approve your requests but chances are you’ll have to pay for them. 
• Paying for someone else’s asset. Any upgrades are going to benefit the landlord only, and you are likely going to end up not getting the money back that you may have put into your home. On top of that, you’re also paying for someone else’s property and mortgage taxes. Landlords can also sell that property at any time. 

Pros of Buying:

• Mortgage interest deduction. Real estate deductions allow you to deduct 100% of the mortgage interest that you paid that year. That means, everything you paid of interest on your mortgage, is tax-deductible. This can save you money, especially in the early years of a loan.
• It’s an asset and investment. Purchasing a house means it’s yours, it becomes an asset. You’re able to do what you want with it, you can paint, remodel, rent it out, sell it, etc. Once your loan is all paid off, all you need to worry about is property taxes and homeowners’ insurance. 
• Renovations. You don’t have to worry about getting approval to do anything to your home unless you live in a Homeowners Association (it also pays to check with your town or county rules).  

Cons of Buying:

• Maintenance. You are responsible for all of the maintenance. Owning a home can be expensive for these reasons. 
• No mobility. Once you own a home, it’s much harder to move. You will probably need to either sell or rent it out. This can take a while depending on the housing market. 
• Housing market. At some point, you will probably want to sell your home. Your home may be more or possibly less valuable then what you originally paid. 

It’s impossible to say renting or buying is a better decision because each one of these factors (and more) depends on your unique situation. You have to consider where you live, what kind of house you’re looking for, how much you pay in rent, how much you’ll pay in the future…and so much more. Depending on your personal preference, timing, and finances, sometimes it may be smarter to rent, and sometimes buying can work in your favor. Our best advice? Do some deep personal digging, learn all you can from others, attend a Homebuyer Education Class, crunch the numbers, then do what works—and feels right—for you. For help and support in your quest for renting smart or homeownership, call NeighborWorks of Western Vermont at 802-438-2303 or visit www.nwwvt.org.