Home ownership can bring a lot of pride. When you own the home, it is yours to renovate, paint, decorate, landscape (etc.) as you choose. However, home ownership also means when something is broken, you have to fix it or pay someone to fix it. Whereas, with renting, you have less leeway in making home improvements/changes, but you can leave the responsibility for repairs to your landlord or apartment manager.
When a person lives and works in a major city, it can sometimes limit the affordability of owning a home and renting may be the best option for his/her budget.
When considering the upfront cost of renting versus buying, renting is typically less expensive. The upfront cost for renting usually consists of one or two months rent, typically referred to as a security deposit. Then you can expect your monthly housing cost to be stable except for utilities and extras such as cable or satellite TV if they are not included with rent. On the other hand, when buying a home, closing costs on a mortgage are typically 3% of the purchase price and can go higher depending on the size of your down payment. That’s $6,000+ on a $200,000 home.
A major difference in buying versus renting is that when one wants to move, the house will (most likely) have value. The apartment will definitely not have any value. Of course, the house may have to be sold before moving to a new home; unless one decides to rent the house to someone else. Leaving a rental home requires nothing more than a notice to the landlord.ne can move to the next place leaving all the rent paid to the landlord behind.
Here are some hypothetical comparisons of costs assuming a $1,500 rent payment versus a $1,500 mortgage payment.
As you can see from the chart, buying a home you can afford and plan to live in for at least a few years is most likely the best option. However, renting is also a viable alternative in certain situations. Remember to consider all of your options in your housing decision.