Should I buy or rent a property?


‘Should I buy or rent a property?’ It’s one of the biggest questions any adult would face at some point in their lives. Many of us draft our goals and make our plans for our future. And an investment in real estate may seem like a good option. But the real estate market has always been a numbers game. Naturally, many people wonder if their money is better spent renting a property or buying it.

The short answer is that there is no easy answer – it really depends on your particular situation. If you plan on getting involved in the real estate market, real estate coaching is the best way to understand the market and take the right decisions. In this article, we will address the aspects you should consider before buying or renting a property.


Buying a home


  1. You can potentially build healthy home equity and credit score:
    Building strong home equity can help you get a home equity loan or credit. You can achieve this by getting a 15-year mortgage plan, paying a sizable down payment or paying higher amounts of money to the principal amount.

    If you pay off your mortgage on time, you could build an excellent credit score. If you have other types of credit, expect to get a better mortgage as lenders typically favor clients who have credit diversity.  
  2. Save money through tax credits and deductions:
    You get to use tax credits when you file your taxes. Let’s imagine that you upgrade your home to an alternative energy system (solar, geothermal, etc). You can now apply for a federal tax credit of 30% of the installation cost.

    After you buy your house, you can deduct your interest payments on any mortgage up to $750 million. Of course, there are many restrictions you need to follow. You can also fully deduct the points or fees connected to the purchase of the house.  
  3. It can be an investment for your future:
    Not to state the obvious, but one of the biggest benefits is that it’s your home! It offers stability for families and lets you get involved in a community. Investing in a house when you’re younger is generally seen as a good investment for your retirement.


  1. Your mobility is reduced:
    When you’re younger, you can relocate to your job location. However, if you put money into a house, your chances of taking jobs outside your city are much lower. It’s also much more expensive and tedious to sell and move up when you own a home.  
  2. The overall costs are high:
    It doesn’t matter if you take out a mortgage or a loan. If you lag behind on your payments, your credit score can drastically worsen and make the interest rates higher.

    Most lenders take a down payment of 5% – 20% of the house’s price. If you opt for a private lender, you need to pay an extra amount every month. When you buy, you’ve to pay for closing fees, insurance, interior décor, utilities, repairs, and house maintenance charges along with your monthly mortgage payments.

    Depending on the condition of the house, the cost of maintenance can also stack up. It could be anywhere from $20 to fix a leaky faucet to thousands of dollars to replace a part of the plumbing system. So, you need to be sure that you can afford all of your fees.

Renting a house


  1. You don’t need to pay for the maintenance of the house:
    One of the biggest benefits of renting a house is that the owner pays for maintenance and repairs. So, if the walls peel off or an appliance breaks down, it’s the landlord’s responsibility to fix it. They are also the ones legally liable for any renovation costs.

    In deluxe neighborhoods, many houses and apartment complexes come with amenities like a pool, fitness center, and a basketball court. The best part is that you can use these amenities for free. On the other hand, the property owners have to shell out monthly charges for those amenities.  
  2. When compared to a mortgage, your expenses will be lesser:
    If you rent a house, you’ll only have to pay the monthly rent and utilities. Although, for most leases, you’ll also need to pay the first month’s rent, last month’s rent, and a security deposit in advance. So, if you move into a costly home, your upfront costs could be high. However, it might still be lesser than taking out a mortgage.  
  3. You don’t need to worry about bad markets:
    It’s not your problem if the property rates in your neighborhood are falling. In fact, if your lease is about to get renewed, you can use the lower rates to negotiate a better monthly rent amount.

    Many of us find it hard to make ends meet. So, you can also use seasonal market fluctuations to find the right rental home in your budget. You also have the flexibility to leave a neighborhood if it gets too pricey for you.


  1. You lose out on house purchase-related tax benefits:
    You don’t get any financial incentives that are connected to owning a house. You can’t build up any home equity and cannot enjoy its rewards. You aren’t allowed to make tax deductibles on any mortgage interest. You also can’t get tax rebates on any upgrade you may have made in the rental property.  
  2. It’s not your property:
    You can’t make any cosmetic changes to a rented property without the owner’s permission. The owner can also request you to move at any time they wish. As the rent rates can increase, you might be forced to move to a cheaper neighborhood. You also can’t earn a passive income from it – you will be the one paying your landlord’s bills.

A brief disclaimer: Please be aware that this article is intended for educational purposes only. You should always consult your financial advisor and make your investments at your own risk.