Buying vs Renting - Written by Daryl Barton

As a Realtor, I get asked this question a lot. Is it better to rent or own? Like most questions the answer depends on a lot of things, mainly your financial situation and lifestyle. Since I have some time and space to elaborate, let’s dive in with a simple SWOT analysis. SWOT is an old school marketing term that stands for Strengths, Weaknesses, Opportunities and Threats, and it will help me organize my thoughts in this question. 

Owning: 

Strengths: Build Equity for yourself, sense of pride in ownership, can’t be asked to move if the owner of the apartment sells the apartment to someone else, freedom to paint the walls and decorate the inside of the house however you want. Your own yard, a home for you and your family that will endure as long as you wish it to. Tax breaks for homeownership 

Weaknesses: Typically more expensive than renting, especially when you consider Real Estate taxes, lawn upkeep and if anything breaks, you must fix it or pay someone who can. You better like your neighborhood because switching houses you own is a lot more expensive and time consuming than finding another apartment to lease. If you don’t have a steady income you might find yourself house poor… meaning the cost of your mortgage and the associated taxes are too much of a percentage of your income leaving you with nothing left for much else. 

Opportunities: Real Estate is one of the most stable tried and true investments you can make. Many smart investors have made a fantastic living buying multifamily homes and renting out the other units. It’s a great passive source of income.

Threats: Any damage to your home you aren’t insured for will need to be fixed by you or fixed by a professional whom you have to pay. If the housing market crashes you could find yourself upside down in your mortgage. 

Renting: 

Strengths: It’s usually cheaper to rent, if you have a very busy lifestyle or travel a lot not having a yard to maintain might be a bonus. You’re usually not responsible for snow removal either so you get your weekends and weeknights to yourself. You have to live somewhere so you’re not throwing money away renting.

Weaknesses: Depending on your lease your rent could go up unexpectedly, or your landlord could sell your building and the new owner could ask for you to leave, they usually have to give you 30 days notice depending on your lease. Must repaint walls, clean and keep generally tidy to receive your security deposit back. Noisy neighbors could be an annoyance, or you yourself making noice could annoy the neighbors. You can’t build any equity renting. 

Opportunities: Saving the money you could be spending on a Mortgage with escrowed taxes and investing in your retirement is a good plan.

Threats: Rent going up, eviction, possibly having to move often 

Bottom line, if you can safely afford homeownership and want to raise a family in a stable household while building equity for yourself homeownership might be right for you. If you’re struggling a bit to make ends meet or you travel a lot or even work a lot and don’t have time to maintain a home renting might be for you. There is no correct answer and either is based on your current situation. 

-Daryl