Buy or Rent?
Choosing whether to rent or buy is a big decision. It's almost always better to own your home rather than to rent. After all, you build equity and get to write off your mortgage interest. And if you play your cards right, when you sell you'll be eligible for one of the best tax breaks around. But that doesn't mean that everyone should be a homeowner. If your move is short-term or if interest rates are high and property values deteriorating, it may be worthwhile to rent for a while.
Here are a few Pros and Cons to consider when deciding on Buying vs. Renting:
Buying
Pros:
- Tax-break: deduct mortgage interest and property taxes
- Potential tax-free capital gain
- Emotional satisfaction
Cons:
- Property tax and upkeep
- Mortgage costs
- Less flexibility should you want to move; in very bad housing markets, you could lose principal
Renting
Pros:
- Flexibility (can relocate easily)
- Can invest money elsewhere (stock market)
- No upkeep fees (drippy faucets, broken dishwashers, etc.)
Cons:
- No equity
- Annual rent increase could outpace inflation
