The Debate of Buying or Renting

For years buying a home was considered a measure of Financial Success. The dream of homeownership has been oversold for years but now it seems like we’re taking it to the other extreme. Many now believe that renting is underrated. So how do we go from believing that it’s a smart financial move to believing it’s one of the worst moves you can make. We have to look at both sides of the argument.

There are several arguments in favor of buying a home. Consider the following:

1. When you pay your home off it’s yours. You eliminate the expense of housing once you paid it off.
2. If the home appreciates more than you paid the mortgage, interest, taxes, and maintenance over time, you’ve earned a return or a break-even.
3. Tax credits help offset some of the cost of homeownership.

They are equally valid arguments in favor of renting:

1. Homeowners have to pay quite a bit in interest and taxes.
2. Renting is throwing your money away because you get a place to live.
3. Renters don’t have to pay for repairs, maintenance, or similar issues.

All these arguments are valid but there is a vast grey area, with individual factors to consider. There is no right or wrong answer.