Renting vs. buying which is better for you is the million-dollar question asked by many every single year. After renting for about 5 years, I sat down and asked myself the very question, is it better to fund someone else’s a mortgage or fund my own? I knew the answer for me was the latter but I also knew at that time, I was in no position to afford to buy my own place – I did not have the savings. This did not stop me from knowing that buying would be better for me than renting and I set about saving for owning my future home.
As a former renter with over 10 years experience in that department, I can tell stories both good/bad about renting and recently I shared tips on what makes a good landlord. Because the relationship between the landlord and the renter is a delicate one which can be painful or a wonderful experience depending on the type of renter and landlord you have. But if you are interested in owning your own home in there near future, then I am sure you have asked yourself – renting vs. buying which is better for you?
Disclaimer: I am not an expert but have done my research and based this post off my own personal experience as a renter and a homeowner.
Renting vs. Buying which is better for you?
Renting vs. buying, which is better for you is a question only you can answer. It is easier to say buying is better than renting but at the end of the day if financially you will fall into even more debt then buying is not the right path for you. If however your finances can sustain the rise and fall in mortgage interests rates and are paying more the same in rent then buying your own home might be the right path for you.
Back in 2014 when I had been renting a 1-bed apartment I sat down and considered my financial standing and realised I was spending about the same amount on rent as those who were paying a mortgage. Whilst I had 1/4th of a house, they had a whole 3-bed apartment and I was shelling out the same amount in rent as those with mortgages but I also knew that there would be additional costs associated with buying a property I couldn’t afford then.
Pros of Owning your Own Home
As a homeowner, I can definitely speak to someone of the pros of owning my own home after renting for 10 years. Until I owned my own property, I did not really think much about most of these pros but had considered them as I was making a decision to buy my own property and I am glad I did. There are several pros of owning your own home but the list below is by no means an exhaustive list.
- Potential to earn equity on your property as the house prices rise
- An investment and an asset for the future
- Might be cheaper than renting
- Its your own place and you can do whatever you want (decorating, extension, painting)
- Spend money on it to improve its future value
Cons of Owning your Own Home
Like all things in like there is a yin and yang and its the same with owning your own place. It’s great that it’s yours but it also means when it comes to maintenance of the property you are responsible and you can’t just up and leave and all costs come from your own pocket. Below are some of the cons I have foreseen as a homeowner
- All maintenance costs are your responsibility
- House market uncertainty – things are always changing and you might end up making a loss if you wish to sell during a tough market.
- Your budget can be stretched thin
- You can’t always afford to save up
- Always incurs additional costs (lawyer fees, surveyor, stamp duty, deposit)
Pros of Renting
As a new homeowner, there are certain things I miss about being a renter even though I do not regret the decision to buy my current home. Renting isn’t always a bad thing, it could be what is most affordable to you based on your income or financial situation. Below are some of the pros that I remember from being a renter.
- Property maintenance is not your responsibility (but please always read the fine print).
- You have fewer expenses compared to your landlord or a homeowner
- Mobility is not tied to the property, you can move whenever you wish (but make sure you are not tied to a fixed long term lease)
- Cheaper payments in terms of rent
- Deposits are always lower than saving for a mortgage deposit
Cons of Renting
Renting is not always fun and games especially when you don’t have an agreeable landlord and are stuck in a long term fixed lease. I have had my share of good landlords but also bad landlords that took it upon themselves to go through my things which gave me little freedom and privacy but there other cons of renting that I am highlighting below.
- Rent keeps rising – after only a year into one property, my rent went up which impacted my budget
- You have nothing to show for after renting for years – no wealth creation just funding someone else’s mortgage
- Might have many restrictions – mine has had no pets allowed
- If the landlord decides to sell – you might have short notice to move out and find another place
- Restricted privacy – as I mentioned I had some landlords go through my things
Deciding between renting vs. buying (and knowing) which is better for you can only be answered by you. I shared the costs associated with buying your own property in my budget for homeowners and I think I need to share costs associated with renting (at least in my part of the country). The decision will always be yours and I encourage you to sit down, review your short term and long term finances.
5-years ago when I started preparing my finances to buy a property – I used a budget tracker, cut out what I didn’t really need and got into investing. After 5 years – my investments gave me back enough returns to buy my more and my savings were now focused on paying for the additional costs associated with buying a house.
Are you currently renting or own your own home? What advise would you offer those unknown which decision is best for them?
Jenna Farmer (@jennafarmeruk) says
We rent and it suits us perfectly at the moment; lots of stigma about renting and buying but works for me!
Rosemary says
I’ve had both and as you say there is no perfect situation. Each of them have have pros and cons. I’ve enjoyed owning and I currently love the flexibility of renting. Depends on where I am in life.
Kira says
We rent but have said there are definitely pros and cons to both . Our boiler system
Broke and luckily the landlord had to replace , I’f we didn’t have savings and owned our own home , it would definitely be a cold Xmas!
Rachel says
We’ve looked into it and have decided to save to buy, it’ll be a lot of money and expenses but worth it to have it as our own! xo
Miranda says
That’s lovely and yes owning is definitely worth it in the long run for me personally
Kita Bryant says
I think it can be very situational. Buying for me was absolutely the way to go.
Rebecca Smith says
We currently rent but would love to buy! Hopefully we will be in the position to buy in the not too distant future! This is really helpful
Mama Maggie's Kitchen says
It will be nice and comfy if you have your own home than renting. And it will also make you feel secure. Thanks for sharing this.
Miranda says
I totally agree, if you can afford to then why not!!
Marysa says
These are all important pros and cons. I am sick of paying taxes and it would be nice to be able to rent and be maintenance free as well.
Ciara says
This is a great post I always think about this myself. They definitely both have their own pros and cons . Where I live we have an absolutely terrible housing situation at the moment so both are very difficult options
Miranda says
It’s definitely important to weigh your pros and cons and not just financially but where you want to buy as well.
Kathy says
This is a wonderful post. I think it really depends on your situation. I always said buying would be best if you can afford it. I believe you can save more that way.
Miranda says
I agree and thank you
Beth says
As you pointed out, both renting and owning home have distinct pros and cons. My oldest is 32 and is considering trying to buy a home, but she isn’t ready yet financially. Houses are crazy expensive where she lives.
Miranda says
It’s good she knows she wants to buy and can work towards buying maybe in her current area or another.
Nikki Wayne says
Very detailed post. Everybody should read this since everyone else dreams about having their own home.
monicasimpson28 says
I really miss the perks of just calling the rental office when things break down and they send a guy over. Renting has its perks and we definitely enjoyed it for many years. Now that we own our house I wouldn’t want to go back to renting.
Miranda says
I hear you, I miss calling my landlord for every single problem but I do love that the property is mine.
Heather says
We’ve been renting for over 10 years and when I think of how much we’ve paid and we don’t own anything, it saddens me.
Miranda says
Awww bless you
Ben says
I’m a big fan of home ownership, but I know that it’s not for everyone. I’m glad you listed the pros and cons of both renting and buying. There really is a lot to think about.
Miranda says
I am the same, i am all for ownership but understand it’s not for everyone and not everyone can afford it
Struggle Shuttle says
I rented before I got married. It’s like leasing a car lol. It’s not really yours. I prefer owning. However, my husband and I are looking into possibly buying properties to rent out soon. Great post!
Miranda says
It truly is like leasing isn’t it, it’s definitely not yours
Tammy says
I’ve only rented a couple of years of my adult life, but at that time I had to. I enjoyed renting for awhile. But I also enjoy owning my home.
Miranda says
I did enjoy rending when I used to but I love owning more
Amber Myers says
We rented for the longest time and then finally decided to buy. It can be pricey, but it’ll be nice to have a home that’s always there when it’s paid off.
Miranda says
I know exactly what you mean, once you own it it’s great
Pam Wattenbarger says
I didn’t realize landlords could go through your things. I thought that was illegal. We own our home but it is a lot of expense and upkeep.
Miranda says
It is expensive for sure and yes I thought it was too but I was just mortified and left