How will you know definitively<\/i> whether and when to rent versus buy? In short, there is no single correct answer for everybody. (Sorry!) It\u2019s simply an individual decision. So instead of telling<\/i> you what to do, we\u2019ve combed the data and expert perspective to give you the facts on when it\u2019s better to rent, or to buy your own home.<\/p>\n
Armed with this info, you\u2019ll be well-equipped to figure out which living arrangement is right for your lifestyle and finances \u2014 right now.<\/p>\n Your market could support renting more than buying if home prices are simply too expensive in your area. But there are pros even if the decision to rent decides itself by process of elimination. As a renter, you\u2019re free of additional costs homeowners always incur, such as insurance<\/a> and property taxes. Plus, there\u2019s the cost of maintenance and upkeep<\/a> \u2014 line items you simply defer to a landlord when you rent.<\/p>\n When you rent, you\u2019re beholden only to the terms of what may be a 12-month lease. That gives you a load of lifestyle flexibility, compared with what may be a 30-year mortgage. If you\u2019re dating, for instance, and want to be in a position to move more easily should a relationship solidify, renting might be a better choice for you. Same if you have kids whose growth and evolution through school is an important factor requiring flexibility \u2014 or if you\u2019re in a position to take care of loved ones who may be ill with changing housing needs.<\/p>\n Renting also allows more professional flexibility: If you don\u2019t own your home, you\u2019re freer to change jobs, or to travel for long periods of time with fewer restrictions. And when you own \u2014 especially if you\u2019re heavily mortgaged \u2014 you may feel more beholden to the particular job and salary that allowed you to commit to that mortgage to begin with. If you don\u2019t love your job, that might be undue (and unwelcome) pressure.<\/p>\n If you\u2019re not putting money into a down payment<\/a>,\u00a0plus all those additional hidden costs of homebuying, you can instead put that money into your own business \u2014 or toward any other investment that interests you.<\/p>\n Gregory Brown<\/a>, a top-selling agent with 17 years of experience in Fort Wayne, Indiana, offers a couple of real-world scenarios for when renting might make a lot of sense \u2014 both logistically and financially.<\/p>\n Let\u2019s say a home-seeker is on a six-month contract with a job \u2014 and if things go well, a full-time position offer might be coming down the pike. \u201cThat makes sense,\u201d as a renting situation, Brown says.<\/p>\n Another example of a good time to rent might be for a short-term situation during the building of a dream home at another location. \u201cIf you buy a house for $250,000 and if you move in a year, you\u2019re going to pay a 6% commission, plus you\u2019re going to be paying some closing costs \u2014 it usually comes out to be around 8%,\u201d he says. \u201cOur market has been appreciating for the last five years between 4% and 6%, so if somebody\u2019s going to move in a year, or it\u2019s going to take them a year to buy a home, it\u2019s going to be tough to recoup.\u201d<\/p>\n Of course, also consider that your market could support buying more than renting \u2014 your rent might just as easily be put toward a home you can feasibly afford. The New York Times<\/em>\u2019 excellent rent-versus-buy calculator<\/a> might help give you a better idea of when that\u2019s the case in your area.<\/p>\n Also consider that the flip side of having all that lifestyle flexibility is the other side of the same coin: the potential for a sense that your lifestyle feels unstable. If you rent, you might be in a less financially advantageous position to care for loved ones who may need you down the road.<\/p>\n Beyond that, you have limited flexibility to make your space your own when you rent; you\u2019re running all decisions about design and improvements by your landlord for approval.<\/p>\n Depending on your area, you might find that it\u2019s the cost of renting \u2014 not buying \u2014 that\u2019s the nonstarter. Off the bat, you\u2019re likely responsible for your first and last month\u2019s rent, plus the security deposit, and costs of moving \u2014 all upfront rental expenses.<\/p>\n Don\u2019t forget a pet deposit if you have furry family members, Brown advises, pointing out many other potential hidden costs of renting as well: \u201cSometimes if there\u2019s a washer and dryer, they charge you an extra $100 a month for that. And if you want a garage, they charge you an extra $250 month for that.\u201d<\/p>\n Plus, your rent could fluctuate \u2014 even quite significantly, depending on your local legislation. Or your landlord could sell the property, leaving you without the home you built there.<\/p>\n Play with the rent-versus-buy calculator to consider whether your market could support buying more than renting for your primary home. Or you might choose to buy a house that\u2019s in a different, more affordable, metro area and rent it out as an investment strategy.<\/p>\n When you buy a primary home, you\u2019re also buying a sense of stability \u2014 both in terms of lifestyle, and emotional wellbeing. (You can stay forever if you like!) You can establish roots in a neighborhood, and build your relationship with the community.<\/p>\n \u201cWhen you own a home, you don\u2019t have to worry about the neighbor upstairs playing their music too loud, and somebody having a party or whatever,\u201d Brown says. \u201cYou just have more control on your life. You\u2019re not worried about what somebody else is doing on the other side of the wall.\u201d<\/p>\n You also have the ultimate flexibility with your personal living space \u2014 the costs may be completely your own, but so are the decisions. Your stability is financial, too; your rent will never fluctuate.<\/p>\n![\"An](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/12\/when-to-rent-vs-buy-apartment-666x381.png\")
<\/a>Pros of renting: Flexibility, short-term leases, and reduced maintenance<\/h2>\n
Cons of renting: Fluctuating costs, instability, and limited home updates<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/12\/when-to-rent-vs-buy-house-666x381.png\")
<\/a>Pros of buying: Peace and quiet, stable costs, investment opportunities<\/h2>\n