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Renting VS Buying - Is It Better To Rent Or Buy A House

Reviewed by: David Naimey

Approved by: Chad Turner


Should you buy or rent? As much as I wish I had a straightforward answer for you, I don’t. Instead, I hope to guide your analysis in order to make things just a bit more clear for you. Let’s run down the major benefits of each.


Most often, those that choose to rent want or need flexibility based on one or more of the following factors:

Shorter-Term Commitment

If you’re the type of person who doesn’t know where they’ll be 6 days from now much less 30 years from now (average mortgage length), renting may be right for you. While the typical commitment term for a rental property is one year, landlords sometimes rent for shorter periods of time. This is a major decision factor for those who:

  • May soon be moving due to a change in family, school, work, or personal relationships
  • Appreciate a regular change of scenery
    • This might include a wish to travel often, or a want to try different property set ups (house, apartment, high or low volume buildings, city or beachside)
Lower-Maintenance Lifestyle

One of the greatest things about renting is that the maintenance, for the most part, is someone else’s problem

  • Routine Maintenance
    • Enjoy a pool or gym without cleaning it, a lawn without mowing it, etc.
  • Repair
    • Something goes wrong with the plumbing, AC, washing machine, roof, an appliance, etc. Who’s worrying about paying for that with valuable time and money? Not you.

This lifestyle is a major decision factor for those who:

  • Lead busy lives
    • Maybe you’re a full-time graduate student, a busy executive, a single parent, or just single in general and want to reserve your free time. You know, someone who would rather enjoy their time off in some other way than wrenching on the leaky faucet in the guest bathroom.
Lower Financial Risk

When you rent, you pay a premium (in the form of a rental fee that exceeds the relative amount of value you receive from the property), but the rent you pay also guarantees that you can never lose more than the amounts you have contracted for. In other words, your wealth is not on the line when the house or apartment you’re renting lowers in value.This is a major decision factor for those who:

  • Plan to live in their next property for less than three years (the national average break-even point for owning a home in a healthy market).
  • Are not comfortable with the financial commitments of owning a home.
    • For example, compare fixed-cost rental payments with tax, insurance, and maintenance costs that often shift with home ownership.
  • Have a fluctuating income that would make a larger monthly commitment unmanageable.
  • Do not have much financial faith in the concept of owning a home as an asset.
    • Maybe you’re the sort of person who prioritizes investing in other areas.


There are many reasons why someone buys instead of rents, but most have to do with having the will (and money) to take on more risk in order to gain the following rewards:

Customization and Peace of Mind

Buying a home often instills a feeling of stability, which includes freedom from most of the rules and restrictions that come along with renting. Also, buyers have much more freedom to renovate and adjust their living space to suit their everyday lives and make their time spent at home more enjoyable.

Long Term Financial Rewards

If you’re the sort of person who has a fairly good idea of where you’ll be for the next several years, buying may be right for you. Buying a home may afford you the following financial benefits:

  • Taking Advantage of Attractive Mortgage Rates or Home Prices
  • The average mortgage interest rate in the United States over the last 50 years has been around 10%. Recent times have held lower rates, but the future is uncertain and we may soon return to higher average rates. Higher rates mean less access to more expensive homes for the average person. Buying a home now may reduce the risk of being locked out of your dream home.
  • Home value appreciation is another potential gain with buying a home. In very strong markets, homeowners may gain equity in their home very quickly. Home values fluctuate, however, and they could always decrease in value as well.


The most important asset class for the majority of Americans is their primary home. Homes are relatively expensive assets, and homeowners tend to accumulate much of or all of the equity interest in their homes. Effectively, homeowner’s equity often becomes savings from which to draw on in the future.

Tax Benefits

Federal, state and local governments often incentivize and support homebuyers through tax deductions.

Understanding these pros and cons, hopefully you are more ready than ever to make the buy vs. rent decision. Happy shopping!


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