Decide what’s right—rent or buy?

Maybe you already know what’s right for you, or maybe you’re trying to figure out the best option—either way, the more educated you are, the better informed you’ll be.

Renting may be an option if you:

Plan to move around and don't want to be tied to one location
Don't have the funds for a down payment and closing costs
Can't afford the potential maintenance costs of owning (repairs, lawn care, etc.)
Are saving for the future

Buying may be an option if you:

Plan to stay in one location
Want to build equity over the long-term
Have funds for a down payment and closing costs
Want the potential tax advantages (check with a tax advisor for details)
Can afford the maintenance costs of owning (repairs, lawn care, etc.)

Here’s a snapshot of how renting and buying may differ.

Initial Costs

Renting

Rental application fees
Broker/Agent fee (if applicable)
Security deposit
First—and sometimes last—month's rent
Moving expenses

Buying

Mortgage application fees
Earnest money
Down payment
Closing fees
Moving expenses

Ongoing Costs

Renting

Rent
Renter's insurance (if applicable)
Some utilities may be paid by the landlord—be sure to ask

Buying

Mortgage
Homeowner's insurance
Homeowner's Association Dues (HOA)/Condo fees (if applicable)
Private Mortgage Insurance (if applicable)

Renting

Included usually as part of the monthly rent (though each property may vary); however, improvements or changes to the property are limited.

Buying

Pay for maintenance and any repairs. (Some homes may include these expenses as part of the monthly HOA/condo fees.)

Renting

None

Buying

Pay local property taxes (either monthly as part of an escrow account or you pay directly on a semi-annual or annual basis); however, both mortgage interest and property taxes are usually tax deductible.
Consult a tax advisor for complete details.

Renting

Choose from 3-, 6-, 9- or 12-month terms (or month-to-month) giving you the flexibility to move/change locations.
Usually the longer the term, the lower the monthly payment; however, there may be penalties if you leave or terminate the lease before the end of the term.
Fixed payments for the term of the lease only.

Buying

Own the home until you choose to sell or rent the property.
HOA fees, property taxes and homeowner’s insurance typically increase over time—so be sure to plan for that in your budget.

Renting

Short-term flexibility
Ability to move around, change location if needed – especially if new to an area
Don't have to worry about repairs and maintenance
Monthly costs are usually fixed for the term of the loan
Some utilities may be included in your rental payment

Buying

Long-term stability
Build value over the long term
Pride of ownership
Interest and property taxes are tax deductible—check with your tax advisor