How to compare homeowning and renting

The place you live in is a big part of your life. It’ll impact most of your experiences, which is why choosing whether to rent it or buy it is such an important task.

For some people, the choice between renting and homeowning is clear as day. Yes, there are some cities where renting is cheaper and it’d be advisable to stick with this option. However, in most cases, the decision is more personal and everyone should consider what some variables look like in their own situation.

Short-term costs

In this aspect, renting is generally cheaper than homeowning. If you’re a tenant, you’ll possibly be charged with a security deposit on your first rent payment and nothing else. Homeowners, on the other side, must shoulder the costs of a down payment for their mortgage loans in addition to fees, taxes, and homeowner’s insurance.

Long-term costs

When it comes to the bigger picture, there are more costs on both sides. Tenants have to pay for some utilities that aren’t covered by their landlords, like Internet service. While this can vary from case to case, rent payments are common to all renters. Likewise, homeowners need to make their mortgage payments. They also have to pay for all utilities and the possible problems that could come up. Insurance and maintenance are an unavoidable downside of homeowning.

Generating income

If you want to use your place to generate income, you shouldn’t go for renting. This won’t give you many options to do that, unlike homeowning. Having your own place lets you decide whether you wish to rent it or even rent a room in order to pay off your mortgage, for example.

Building equity

You can learn what equity is in this article. If you already know what it is and how it works, you’ll know that owning a house will make it possible, but renting won’t. In fact, the latter increases your expenditure while homeowning lets you accumulate wealth. Its high rates of appreciation make real estate flipping even more profitable.

You don’t even need to own a house to invest in real estate! Read this article to know more about Fundraise, one company that makes it possible through crowdfunding.

Liberties

The freedoms that come with renting are quite opposite to those with homeowning. Tenants can easily move from city to city and home to home. Homeowners have it more difficult, as they have rather conservative options if they decide to move out. However, they can choose more freely what they can do in their homes. Whether it’s an activity or an upgrade, they can go through with. Renting doesn’t have this liberty; you need to ask your landlord for possible limitations on your activities and beware of the danger of eviction.

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