The ability to own a home is a dream come true for many people. By owning a home, you have the opportunity to invest and build equity on a property of your own, not to mention carve out a space that reflects who you are without restrictions.

Many renters are worried about taking the next steps in owning a property, because they worry about down payments, property taxes, maintenance, and insurance. All of this can make buying a home seem like wishful thinking — which is why many people choose the faster route to rent instead.

Is renting really cheaper than buying a home? To figure out the answer, there are a lot more aspects to consider than just the upfront financial costs. As such, we outlined a few of the advantages and disadvantages of renting.

There Is No Return In Investment When You Rent a Property

You’re paying hundreds of dollars a month to live in your rental home, and if you want to move, it’s definitely much easier. The problem is renting a home doesn’t offer you any investment opportunities or create any equity.

Unlike paying off your home loan and building up that equity, the money you pay when you rent goes straight to the property owner of that property and you will never see that money again.

You Don’t Build Credit When You Rent

Your credit score often does not factor in your on-time monthly rent payments, so renting a property isn’t a great way to build credit. But, when you’re paying money towards your mortgage, those on-time payments can give you a nice boost in your credit score.

Further, renting doesn’t provide you with any tax benefits from Uncle Sam. However, if you’re a homeowner, you can benefit from some tax deductions that include mortgage interest, property taxes, and can also exclude capital gains when you sell.

You Cannot Customize Your Living Space

Most of the time, the opportunity costs of renting a home greatly outweigh the benefits, especially when it comes to customization.

As a renter, you might be restricted by rules and regulations in your rental complex that prevent you from changing your space to fit your style, such as painting the walls, upgrading the kitchen, or making other improvements. Some places have even more complex rules that might prevent you from having a pet or that you only have a parking space for one vehicle.

When you’re a homeowner, you can customize and improve your own space, by investing in home improvements, and live with your furry friend. Why not live in a place that allows you the independence and freedom without any restrictions?

You Have a Harder Time Connecting with Your Community

When you want to establish roots, living in a tight-knit community has many benefits, some of which you might miss out on by living in short-term housing. If you really want to get to know your neighbors and develop more lasting bonds, then homeownership is the way to go. Further, you might have a lease that will increase every year and if the property owner decides to sell, then you might be forced to find another rental property to live on.

The Bottom Line

If you’re a renter then you have the flexibility and little to no maintenance to worry about, but if you decide to move again or if you’re forced to leave after the lease ends, then you’ll have to take into account that you must save for the first, last and most times a security deposit for your next rental. Buying a home is a long-term investment that gives you a space you can customize, helps you build credit and equity, and connects you with your community.

As your agents, we want to help you make the best decision, and we have important real estate market resources that you can use to help you decide if renting is cheaper for you than buying a home. Just contact us at Movementum Realty and we can talk about your plans and get you started building that equity!