Decide what’s right—rent or buy?
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.
- Rental application fees
- Broker/Agent fee (if applicable)
- Security deposit
- First—and sometimes last—month's rent
- Moving expenses
- Mortgage application fees
- Earnest money
- Down payment
- Closing fees
- Moving expenses
- Renter's insurance (if applicable)
- Some utilities may be paid by the landlord—be sure to ask
- Property Taxes
- Homeowner's insurance
- Homeowner's Association Dues (HOA)/Condo fees (if applicable)
- Private Mortgage Insurance (if applicable)
- Included usually as part of the monthly rent (though each property may vary); however, improvements or changes to the property are limited.
- Not included. Maintenance and any repairs are paid separately. However, some homes may include these expenses as part of the monthly HOA/condo fees.
- 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.
- 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.
- 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.
- 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 lease
- Some utilities may be included in your rental payment
- Long-term stability
- Build value over the long term
- Pride of ownership
- Interest and property taxes are usually tax deductible—check with your tax advisor