Renting or Buying:Advantages and Disadvantages

Renting		Buying
Advantages		Disadvantages
More fixed costs for the term of the lease		Variable costs
Not gaining equity, but not losing it either		Equity may go up, down, or stay stagnant
When the lease is up, you can just move		If you want to move, home generally must be sold
There is generally less work in maintaining a home or apartment		Work needs to be done by you–or paid for by you
Smaller amount of “up-front” cash		Generally a larger initial investment–the downpayment

Renting

Buying

Disadvantages		Advantages
No matter what happens with the value of the home, you will never gain equity		Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase
Limited–or no–ability to personalize your living quarters		The ability to remodel and redecorate the home to match your needs and desires
No tax advantage to renting. Your landlord gets any and all tax breaks that are available		There can be tax advantages attached to home ownership. Consult competent legal and/or accounting advice for details for your situation

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