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Renting vs. Buying: Which Is Right for You?

Homeownership has been an integral part of the American Dream for decades, and it’s no mystery why—owning a home provides stability, equity, and a sense of belonging, among other things. For many, however, the mobility and low upfront costs of renting have made it a more appealing option. But if you’ve been considering making the shift from renter to buyer, you might be wondering which is really best for you, renting or buying? Here’s the lowdown on renting vs. buying.

Weighing the Pros & Cons of Renting vs. Buying

considering renting vs. buying

There are pros and cons to both renting and buying, of course. And ultimately, the better option for you will depend on your personal and financial situation. We recommend taking some time to think about what’s most important to you before making a decision.

Mobility: Pro for renting

moving to a new home

One of the biggest advantages to renting is being able to pick up and leave when you need to. This is a good option for those who are new to an area and haven’t settled on a location, or who might need to relocate for work or other reasons within the next few years.

On the flip side, when you own a home, moving typically requires a little more preparation and planning; you’ll likely need to get it cleaned and ready, then list and show it, then run through the closing process before you can leave it behind.

Equity: Pro for buying

building equity when buying

One of the biggest advantages to homeownership is equity. When you rent, the money you pay to your landlord is money you will never get back. You can live in your rental property for 30 years and you’ll never own it and you’ll pay rent on it as long as you live there. When you move, you get nothing back (except maybe a security deposit).

When you own, on the other hand, a portion of the money you spend every month goes towards your mortgage. The longer you stay, the more you pay down. Until one day, you won’t be paying a mortgage anymore! And when you sell your home, you likely won’t leave empty handed (especially if you’ve paid down a good chunk of your loan).

Upfront costs: Pro for renting

calculating mortgage costs

One of the major downsides to buying a home, particularly your first home, is that there are usually some pretty large upfront costs. Even without a 20% down payment, closing costs can still amount to a few thousand dollars.

Renting, however, is usually fairly cheap in comparison. You may be required to pay a few hundred dollars in a security deposit and some administrative fees, as well a month or two of rent upfront. All total, you’re looking at a few hundred to maybe a few thousand (depending on your rent)—which is nothing compared to the tens of thousands you’ll likely pay buying.

Financial predictability: Pro for buying

calculating pros and cons of renting vs. buying

Another big pro for buying is predictability in payments. When you rent, you most likely sign a rental agreement for a year, maybe two, at a certain price. After the end of your lease, you are typically required to renegotiate terms with your landlord. A good landlord will try to keep rent fair with market prices. A poor landlord might raise prices without warning, making your home suddenly unaffordable!

When you buy, on the other hand, you’ll know what you’re going to pay every month for the next 30 years. Choosing a fixed-rate loan (the most common) means locking in an interest rate, and a monthly mortgage payment, that will last for the duration of your loan. That means no surprise price jacks should the market rise or fall.

Low maintenance & responsibility: Pro for renting

mowing the lawn

A big pro to renting is not holding much financial responsibility for the property. Should your building need repairs, fixes, or improvements, it’s your landlord’s obligation to address those needs. Depending on where you rent, you may also be exempt from more regular maintenance, like lawn care, as well as any associated costs that come with regular upkeep.

When you own a home, all those responsibilities fall on your shoulders. If something breaks, you fix it or pay someone to fix it. If something is damaged or destroyed, you must facilitate fixes and repairs (though hopefully your homeowner’s insurance will cover financial costs). All the regular maintenance and upkeep is your job now, too—lawn mowing, painting, replacing, and repairing.

Sense of belonging: Pro for buying

belonging to a home

All practical reasons aside, owning a home comes with a sense of… home. When you buy property, you invest in a community. You put down roots in a place where you may want to get to know your neighbors a little better. You have the freedom to change and grow your home, whether that means painting the walls or adding on a sunroom.

Renting, on the other hand, often comes with a sense of impermanence. You may plan to stay a while, but ultimately, it’s not really in your control, should your landlord decide to sell the property or increase prices. You may also be restricted in the changes you’re permitted to make, as well as the ways you’re allowed to use the property, or even whether you’re allowed pets.

The Bottom Line: There Are Pros & Cons to Each

Ultimately, whether renting or buying is right depends on you. If you plan on staying for a while, if you’ve got some money saved up, and if you’re looking for a place to put down roots and belong, then buying might be the better option. On the other hand, if you’re new to an area, still figuring out your long-term plans, or not quite ready for a big financial investment, renting might be the way to go.

Either way, PRDC is here for you!

Renting? Buying? Let Us Help!

Whether you’re renting a posh new apartment in urban Philly or you’re ready to put down some roots in a luxurious metro-area home, or maybe something in between, PRDC Properties is here for you. We’d love to help pair you with the home that’s best for you and your situation—even if that means building a home. Contact us today to learn more or to get started.

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