One option is not necessarily “better” than the other. However, one option may better suit an individual who is at a specific stage in their life and/or career. So, it is important to understand the benefits of both owning and renting before choosing which option is the best for you.
Advantages of Owning
Owning a home allows individuals to achieve “Home Ownership,” which for many people is a significant milestone in their life. This allows homeowners to feel more connected to their community, because they have established significant roots with this large investment.
The psychology of Home Ownership also explains that individuals who own a home feel less stressed on average when compared to renters. This is because homeowners are less likely to move, have more control over their environment, accumulate equity in the home that can be used in an emergency and/or with other financial goals, and monthly repayments remain constant.
On average, home values increase with time. Therefore, owning a home functions as a long-term investment that will likely generate a return in the future.
When compared to renting, owning offers individuals more stability. As homeowners, individuals have a lower risk of being forced out of their home, because they know exactly how much their monthly repayments will cost. When renting, landlords can increase rent and push tenants out unexpectedly as a result. Additionally, landlords have the option to sell their property which would displace tenants.
Homeowners also have the option to renovate, add approved additions to their homes, build pools in their backyard, etc. Homeowners have relatively full control over their home – they have the power to decide what to do with their home because they own it.
Advantages of Renting
Renting is freedom. Renting is a short-term commitment, so renters have greater flexibility when it comes to moving and traveling. Therefore, renters have greater mobility when compared to homeowners.
Oftentimes, rental properties offer tenants various amenities throughout the property. These amenities can include a pool, fitness center, business center with printers and computers, lounge areas, etc. Renters have access to these amenities at no additional charge.
Renters have no responsibility when it comes to paying for necessary repairs. Therefore, renters have no maintenance costs or repair bills unlike homeowners. If the roof starts leaking or the washing machine breaks down, renters do not have to pay to repair or replace anything.
Renting and owning are both great options, and one is not better than the other. When deciding to rent or buy, it is important to keep in mind what you want your living situation to look like, what you can afford monthly, and the flexibility that you want.