comparing renting a house and buying one

Posted: October 17th, 2013







comparing renting a house and buying one











Renting a House or Buying One

A home is very important, as it is the place of dwelling for any human being. This is where people spend most of their time, where children are born and raised and where people bring up their families. A house or a home can be rented or bought. When a house is rented, it means that one pays a fee every month, six months or year as one agrees with their property owner. When a house is bought, one pays a down payment of a quarter of the value of the house and then pays the rest as a bank loan. After completion, the house is fully owned. There are people who prefer renting a house and those who prefer buying one. One should consider several factors before they decide to either buy a house or rent one (Chesters & Laflamme, 2006).

The decision whether to rent or buy a house depends on where one lives and the path their career follows. Renting a house can prove to be cheaper if one prefers inner city lifestyles where one is hoping from job to job. The rates of rent today are rising everyday while the rates of job openings and vacancies are significantly reducing in the major towns and cities. In such situations, it is highly likely that one’s mortgage payments are going to be higher than the monthly payments for rent if one were to buy a comparable property. Therefore, in such a case it becomes more cost effective to rent a home other than buying one. Moreover, the maintenance, repair and insurance costs for the rental home are handled by its owner therefore as a tenant one evades paying for these ongoing expenses. These expenses however, are handled by the owner of the home if one chooses to buy a home. In a rental home, if one grows fond of a home, for instance, if one has gained sentimental value of a home, one can still be vacated from it as it does not belong to them.  One lives in uncertainty as to whether they shall live in the home or not. This can happen any day or time at the convenience of the owner of the property. The tenant has very little say in the occupation of the house and can be asked to move out once their lease expires, or earlier for several reasons. In a owned home, one never lives with such fears.

If one decides to rent a house, essentially the house is not theirs. For instance, in a rental home, the owner could show up at any instance to check on the condition of the house. This can happen as long as they have a good reason and have provided notice of the visit. These inspections can be frequent and can happen after every month or two. This does not happen when one owns a home as no one checks on the condition of the house apart from you. Moreover, in a rented house, no improvements or refurbishing can be done without the permission of the property owner. Some rental houses are fitted with allowances for improvement that could be done without necessarily consulting the property owner, however these are very few. This is a disadvantage for renting as in an owned home, one decorates, moves and shapes whatever they want however they want (Irwin, 2008).

Tenants are faced with the challenge of the rising costs of renting. A house’s rent can be reviewed to a maximum of about 3 times in a year as long as the owner feels like doing so. Therefore, though the rent option is always the cheaper one, the rent will always keep on rising and so does the cost of living. In the case of a rental home, there are no rent charges and the mortgage repayments cannot be adjusted upwards unless in the case of inflation. Therefore, the home owning option becomes cheaper. A tenant will never stop paying rent. This is a disadvantage considering, another person who shall finish paying up on their mortgage after twenty to thirty years, and then own the home.

When one owns a home, a sense of stability is achieved. One can choose how long they want to live there and how their house will look, inside and out. A homeowner can also make improvements to their house and living space. This adds value to the home while creating equity. On the other hand, these actions are not feasible to a tenant. A tenant is limited on the changes they can make to a house and how long they are to live there. Renting a house costs money, while owning one’s house adds value to the house thus making money. This occurs as one pays off the mortgage to their house, the house increases in value and more equity is earned. An average house, doubles in value every ten years, which provides a very fruitful return to the investment of owning a home. Moreover, this increases a person’s net wealth as the house is among one’s assets.

The mortgage repayments over the period of repayment of the home loan will remain generally constant and though they can be affected by increases and decreases in interest rates, these fluctuations shall be planned for as long as one bought a home in their range of earning. On the other hand, rent payments can only be revised upwards and never downwards. While in pursuit of owning a home, the repayments may be spread over a period of twenty to thirty years, however, these payments may be completed in a shorter period if one wishes. The planning involved is quite smooth and easy as the amounts of repayment are generally consistent. On the other hand, a tenant shall always rest on the mercies of the owner of the property to know how much rent they are going to pay and may never get the pride in the feeling of owning a home. Indeed owning a home comes with great additional costs like repairs, maintenance and rates and the mortgage repayments might be slightly higher than rent payments, however, the end here justifies the means.

Before one makes the decision either to rent or to own a home, one has to consider how often they expect to move in the future. This could be related to one’s occupation or lifestyle. If one expects to be moving frequently, it would not be viable to own a home as it would not live to its value. Moreover, if one were to own a home with this kind of lifestyle, they would incur a lot of money when selling and buying new homes wherever they moved to. These costs are quite significant and include commissions in selling which average at six percent of the value of the property. Therefore, unless the value of the home increases, it is better to rent when one moves around a lot other than buying a home.

Before making the decision whether to own or buy a house, one needs to put into consideration how stable their job is. If the job lacks stability, it would be advisable not to think of buying a home. This is because home ownership requires a number of regular payments like mortgage, utilities, property taxes and maintenance, just to name a few. If one misses any of these payments, there would be dire consequences that one would face. Therefore, it is advisable that, until one secures proper employment, the option of buying a home should be far from their thoughts. In this case, the option of renting a house would be the better option. Coupled with stability of employment is the issue of how much one can afford to pay for their housing. For one to be able to buy their own home, their total income needs to be more than three times the mortgage repayment cost and the other costs that are involved. These costs include the property taxes, the mortgage repayment, and the utilities. If ones costs added with all other that one incurs including previous loans exceed forty percent of the gross income, they are not eligible for the home loan and therefore the option of renting a house until they are is better.

An individual’s budget also determines whether they are competent enough to own a home or not. As a person who rents, one is able to save a considerable amount of money every month. If one is thinking of owning a home, they should think of how much money they can be able to set aside for events like emergencies. However, a homeowner who was a renter may not be able to save as much money as they were saving when they were renting. Therefore, for a homeowner, it is crucial that they leave something to save after paying all their costs. If owning a home shall cause one to overstretch their budget, it is not a good idea for them to own a home.

Good decision-making is important when considering buying a home. In comparison to paying rent, when one desires to own a home, one needs to be patient and thoughtful as this is where they would like to spend the rest of their life. Hasty decisions will lead to regrets and therefore one needs to seek proper advice before proceeding to purchase the home. The location of ones workplace also determines whether one should own a home or rent one. This is because, one could buy a house in a good, quiet and serene neighborhood, but they could be traveling hours before they get to their place of work. A proper location to live is about an hour away from work, time calculated during rush hours when there is heavy traffic. This ensures that when there is no traffic it takes a few minutes to get home. If a house is not available in close proximity to the place of work, which rarely happens, it is usually proper to rent a house. Considering the market status, the predictions might point that it is generally a good time to own a home. As much as this might be true, it should not drive one to buying a home, as it might not be the right time for them individually. This is because the current situation may favor people who had been prepared but if one does not have enough money in their savings, they are not yet ready to buy a home. Home ownership is a matter of choice. An individual should make the personal decision of owning a home (Reed, 2004).

Renting a home has different advantages for different people at different points in their lives. A young adult who is just starting in life has an easier time renting. This is because renting involves little responsibilities in terms of repairs and maintenance, which this person would find to be strenuous and time consuming. These rental complexes favor young people as they provide many social and recreational facilities like gyms, sports courts, a swimming pool and even laundry facilities. Renting also offers flexibility and mobility for an individual. This is because most young people are not very static in their jobs and always want to advance by getting better ones. This shall mean that they shall have to move often to relocate to wherever greener pastures have been found. Moreover, their families change at some point in terms of things like marriage and having children. Therefore, it is easier for them to get out of the tenancy leases than selling of a house, which could take several years (Milevsky, 2010).

Renting is also advantageous, as it does not require a large cost in cash. Most of the rental homes require about two to three months of rent as a security deposit and then the monthly cost in rent. Renting is disadvantageous in the sense that one lacks control over the property. The owner of the property is the one who is directly responsible for any repairs on the property. If the owner or proprietor of the company does not repair the house in time, one might be stuck in an unsafe or unpleasant house. Renting also offers no benefits in terms of tax or equity to an individual. One plays the role of helping the owner of the property pay for their taxes and loan and the tenant has no right to claim any deduction on their taxes.

Buying a home comes with a proud feeling of owning ones home. It also comes with the freedoms to landscape, decorate and sculpture the place to your own tastes and preferences. These are all control aspects, one gains control of their place of dwelling. The biggest advantage of home owning is the fact that one’s net value increases. The other advantages that come along with it include the tax deductions due to equity, interests and the tax reductions for property. The financial equity of the home is built up every time one makes a payment towards the mortgage. Therefore, the owner’s equity increases gradually. Though there are other costs that are involved with the mortgage payments like the mortgage interests it is indeed better to own one’s home instead of renting one; this however is depending on one’ lifestyle.


Chesters, G. & Laflamme, B. (2006). Buying or Renting a Home in New York: A Survival Hanbook. Hoboken, NJ: Survival Books.

Irwin R. (2008). Tips and Traps When Buying a Home. New York, NY: McGraw-Hill Professional.

Milevsky, M. A. (2010). Is Buying a Home or Renting Right for You? New York, NY: Pearson Technology Group.

Reed, C. D. (2004). Mortgages 101: quick answers to over 250 critical questions about your home loan. New York, NY: AMACOM Div American Mgmt Assn.


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