The important decision of buying or renting a home can have many implications. Buying a home or condominium unit offers a number of benefits versus renting with regard to independence and eventual reduction of expenses, while renting provides benefits involving maintenance, monthly/yearly cost, and relocation. Read on to learn more about how home buying compares versus renting…

Buying a home gives its occupant greater control in comparison to renting. The owner can change its exterior or interior paint color, pave the driveway, put up a television antenna, install a woodstove, or add a rooftop solar panel, all without needing approval. Buying can also give the owner potential access to the financial benefits of home equity loans and/or reverse mortgages. There is no potential that the occupant will be forced to move elsewhere because of a landlord’s decision to sell the property to someone not interested in renting it out. Buying also creates the possibility to improve the home and resell it at a greater price. Unless an interest-only mortgage is used, the homeowner eventually no longer has to make monthly payments, after the mortgage has been paid off over a number of years. This is preferable for retirement, as the mortgage payments might have ended by the time you want to retire.

On the other hand, renting offers some benefits as well. Renting a home or apartment eliminates a number of separate expenses; property taxes, some types of insurance, condominium fees, public water costs, etc. However, a substantial security deposit is usually required. It also prevents unexpected maintenance costs, provides and maintains some types of appliances, and usually eliminates the cost of removing snow and trash. The monthly and initial cost is generally less than that of buying a home, although there is no ability to eventually finish making payments. Costs are more predictable (especially if heat and/or electricity is included) and there are fewer separate bills to pay versus those involved in owning a home. It is easier to relocate to a new area when renting, as providing one month’s notice before moving out is usually much faster that waiting to sell a residence.

Overall, the choice of buying versus renting which offers the most benefits depends upon your plans for the future, your home maintenance and improvement abilities, and personal preferences regarding where and how you want to live. You will also need to compare the cost of both options, by the month, year, and long-term.