Buying A Home

Renting vs Buying a Home: Which is Better?

If you’re thinking of buying a home, focusing on just the monthly mortgage payment won’t give you an accurate idea of what it costs. You also have to take into account things like homeowners insurance, property taxes, repairs and maintenance. There’s also the down payment and the closing costs to keep in mind. These are things you don’t have to worry about when you’re renting so it pays to have the most complete financial picture possible before making a final decision.

Consider your time frame

Buying a home is a long-term commitment that typically requires a significant amount of time and money.

Depending on the size of your mortgage and how much money you put down, it can take anywhere from three to seven years to recoup the initial cost.If you end up having to move before you’ve reached the break-even point, it directly affects how much profit you’re able to realize on the sale.

With renting, on the other hand, you’re not as limited by a physical location. If you get a better job offer in a different city, for example, you may be on the hook for any remaining rent due under the terms of your lease but there generally aren’t tens of thousands of dollars on the line.

If you end up having to move on short notice and your home doesn’t sell right away, you could be juggling two house payments which can put a real strain on your budget.

Weighing the investment argument

Most financial experts agree that a home is an investment but you shouldn’t let that alone sway you into buying a home. While it’s true that owning versus renting means you’ll be building equity in the property, the housing market collapse is proof that home values can fluctuate drastically. Millions of homeowners saw their equity disappear seemingly overnight and only in the last year or so have values begun to climb.

As the home gets older, you may see your equity increase as you chip away at the mortgage but you’ll be putting more back into the property for maintenance and upkeep. The cost of keeping the home may eventually reach the point where it cancels out any gains on your investment.

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website,


  • I’m wondering what are the pros and cons of taking a garage and making it it into a rental apartment? I know some of them such as the loss of my total privacy the cost of the construction etc. but i dont kow what are the real numbers at the end of the day? How long does it take for the income to cover the construction costs?

  • Good article. Bad examples. Neither Detroit nor Honolulu is at the top of the list for home seekers. Florida is, and so are other States and regions in a State. The article should have focused on the areas that would have the highest impact.

  • Hi my name is Leslie and I was interested in seeing about your program and was wondering if you had any home with rent to own or owner will carry I do have credit issues and I trying to get them trying to pay them .

  • Hi Ms. Lake – I am
    seriously thinking of selling and moving to another location due some stalking matter. How should I go about it? I need to sell the house as is, that means lost. Please advise.

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