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The Pros and Cons of Renting vs Buying a House

There are many pros and cons of renting vs buying a house. There are advantages to both, but there are also disadvantages to consider as well before making a decision.

When figuring out where to live, it can be difficult to decide between renting vs buying a house. There are many pros and cons to renting vs buying a house that can help you make a final decision about what's right for you. This article hopes to answer the question, is it better to rent or buy a house? 

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Is it Better to Rent or Buy a House?

The answer to is it better to rent or buy a house depends on many factors. There are several variables that need to be considered for renting vs buying a house, like where you live, your monthly income. 

Where you live will impact the monthly rent in your area, as well as the cost of buying a home in your area. Some places are more expensive than others. 

How much money you make will also impact whether you can handle the upfront costs of buying a home, like homeowners insurance, closing costs, HOA fees, and mortgage payments. 

So whether it is better to rent or buy a house depends on your financial circumstances as well as the housing market in your area. 

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Should I Rent or Own a Home? 

Figuring out, should I rent or own a home, can be a hard decision. There are also many factors that go into the decision between renting vs buying a house. For example, if you don't have savings for a down payment, you might be better off renting while you save. When deciding whether you should rent or own a home, you need to consider the following factors: 

Your Credit Score 

Not all rental properties require a good credit score, but some do. So, you may need to have a decent credit score in order to rent, but there are rental options available for those with lower credit scores. 

Mortgage lenders almost always require a good credit score in order for borrowers to get approved. So, if you want to buy a house instead of rent, you will most likely need to make sure your credit score is doing well first. 

Credit score graphic

Your Monthly Income

Whether you're renting or owning a home, you'll need monthly income to take care of the monthly rent or the mortgage payments. whatever type of housing you choose, there are going to be monthly payments involved and you want to make sure you can afford them. 

The Monthly Rent in Your Area 

In any city or town, there is usually a high to low range of monthly rent costs. Check out this range to find out if you can afford rent in your area. Be mindful, that with renting there can sometimes be other monthly payments involved like utilities or HOA fees. 

The Housing Market in Your Area 

In any city or town, there is also a housing market with their own range of home prices. Browse the housing market near you to see what kind of real estate is available and what the mortgage rates would look like for those homes.

Comparing the average costs of homes and renting in your area can be the quickest way to decide between renting vs buying a house. 

Housing market, homes in a shopping cart

The Pros and Cons of Buying vs Renting a Home

There are many pros and cons to buying vs renting a home. Outlining all the many pros and cons of renting vs buying a house can help you compare buying vs renting so you can make the best decision for you and your household.

The below table shows some of the pros and cons of buying vs renting a home. Take a look at this renting vs buying a house comparison chart and try highlighting the items that are the most important to you. You may find that one column gets highlighted more than the other, helping you make a final decision on whether you should rent or buy. 

renting vs buying a house pros and cons chart

Can You Buy an Apartment? 

If you want something in between renting vs buying a house then you might be interested in buying an apartment or a condominium. An apartment or a condo can be a smaller investment into real estate before buying a house. Some apartment and condo complexes will also have HOA fees that can include things like maintenance, so you don’t have to worry about things like mowing the lawn, but you still own your own space. 

But now you have to answer the question, can you buy an apartment? The process for how to buy an apartment will look similar to how to buy a house, but the costs involved will be much lower than for a house.

You'll work with a real estate agent to finalize the deal, pay things like the closing costs and down payment, and enter into a mortgage agreement with a mortgage lender. Now instead of paying monthly rent to a landlord, you'll be your own landlord and pay mortgage payments instead. 

In Conclusion,

Housing can be a complicated and big decision. That's why it's important to sit down, look at your finances, and weigh the pros and cons of renting vs buying a house for yourself. Depending on your finances, renting might be cheaper, but if you are looking for the privacy and control and investment opportunity that owning a home can offer, buying a home might be for you.