Renting or Buying: Advantages and Disadvantages

If you are considering buying a house, one of the first decisions you need to make is whether buying a house instead of renting one is the right direction for you. Since owning a home is the "American Dream", many people simply assume that it's always to their advantage to buy a home, and for most, it is. Take a moment to review the following lists to see how your situation fits in.

Renting
· More fixed costs for the term of the lease
· Not gaining equity, but not losing it either
· When the lease is up, you can just move
· There is generally less work in maintaining a home or apartment
· Smaller amount of "up-front" cash
· No matter what happens with the value of the home, you will never gain equity
· Limited--or no--ability to personalize your living quarters
· No tax advantage to renting. Your landlord gets any and all tax breaks that are available

Buying
· Variable costs
· Equity may go up, down, or stay stagnant
· If you want to move, home generally must be sold
· Work needs to be done by you--or paid for by you
· Generally a larger initial investment--the downpayment
· Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase
· The ability to remodel and redecorate the home to match your needs and desires
· There can be tax advantages attached to home ownership. Consult competant legal and/or accounting advice for details for your situation.