Renting versus Buying: The Ultimate Guide

Renting vs Buying: The Ultimate Guide

As the recession of 2008 closed out, the number of Americans renting absolutely skyrocketed. This surge came after a record-long period of renting decline from 1994 to 2004. Renting statistics show that it still remains a popular housing option in the United States. Even when homeownership continues to dip, renting remains a more affordable and flexible option. At Zumbly, we’re dedicated to helping you find the right living option for you. Here’s our guide to the difference between renting and buying a home.

Renting

A tenant pays for a rented property for as long as they occupy a space. The occupant and the property owner agree on an amount to put down on a lease agreement to be paid monthly. Apart from the monthly rate for the property, the lease also specifies a due date for the rent as well as renting rules and regulations.

Related: How Does Rent to Own Work in the Year 2019?

Homeownership

Homeownership is when someone purchases a house or pays periodic mortgage to acquire the house over a period of time. As people strive to attain financial freedom, a huge part of becoming financially stable is owning one’s home. 2019 has seen a dip in homeownership, but that doesn’t mean Americans are giving up on their dream homes.

It just means they have to find more ingenious ways to make that dream come true. Sometimes, renting is the right strategy.

Advantages of owning 

It’s private property

The privacy that comes with owning a home can be transformative for people who value security and self-sufficiency. While the law definitely provides for the reasonable expectation of privacy even for lessors and renters, renting property raises the chances of exposure to public scrutiny (read nosy neighbors) compared to living on privately owned property.

Incrementally grows in value as an asset

A house increases in value over time. In addition, you continue to build home equity as you continue to make mortgage payments. Building home equity means you have an equivalent financial stake in your home and, should you need to, you can use the equity to liquidate some cash.

To increase the equity of your home, begin by paying as large a down payment as you can. If you can surpass the 20% ceiling for conventional loans, do so and then focused on paying off the mortgage as fast as you can.

You can renovate

When you own your property you can renovate whenever you want to. Not only does can you convert your space into the home you’ve always been dreaming about, but renovations can also increase the overall property value. Rental houses rarely, if ever, allow renovations. You can tackle renovations gradually so they’re easier on the pockets and increase property value over a steady period of time.

Homeownership is more stable 

Once you have calculated the mortgage payments, you’ll have a predictable monthly figure for the duration of the mortgage. Unfortunately, rents are not as stable. Rent increases happen regularly as unwitting tenants get priced out, particularly in urban centers.

Another aspect of stability with homeownership is that once you buy a property, you become invested in the community around. A home can help foster a sense of pride and belonging.

Disadvantages of owning

It’s financially intensive

Owning a home is often a lifetime investment and commitment. The costs are always present whether you’re paying the mortgage, doing renovations, or simply keeping up with the regular maintenance of your home. A homeowner is responsible for minor repairs like a leaky faucet to the complete overhaul of the plumbing system. Unfortunately, despite the fact that mortgage payments are fixed, they’re also quite steep compared to rents.

Value growth is not immediate

Property doesn’t increase in value immediately. In fact, it can take several years or even longer. A homeowner needs to be okay with the lack of immediate equity gains. In fact, a new owner can expect to spend more than they’ll receive in value the first few years of ownership.

Related: Apartment Investing 101 – The Ultimate Guide

Advantages of renting

Renting is cheaper than owning (in the short term)

This is a short term reality. If you don’t have money to buy, renting allows you to live in a decent space that meets your needs at a fair price. Depending on the market, renting is generally cheaper compared to the payments you would have to make on mortgages of a similar property.

Besides, the rent payments include the additional utility costs that come with any building. The cost of a home does not include associated maintenance, taxes, and legal fees.

You can move

Renting allows one to move around more regularly, a useful benefit for picky renters and those whose jobs require moving around.  Leases are typically yearly contracts, so tenants have the flexibility to move away. Owning a home makes it exceptionally hard to change circumstances.

There are fewer responsibilities

The landlord is responsible for all the property costs, including property taxes and repairs for the property. If tenants avoid liability from purposeful or extensive property damage, they don’t have to worry about repairs and remodeling at all.

Disadvantages of renting

No tax breaks

Tenants aren’t entitled to tax breaks like homeowners are. Tenants also have no control over the rent fluctuations, which may leave them unable to afford living in the house. And unfortunately, rent fluctuations are tied strongly to inflation. The worse off the economy, the more unstable rent payments get.

Renting has rules

A tenant is subject to the rules and regulations put in place by the property owner. They cannot renovate or make any alterations to the house they occupy. Once you sign the lease agreement, you’re bound by the regulations stipulated within.

Choosing between renting and owning ultimately boils down to personal preference. For those interested in long term investments and permanence, owning is the right choice. But for those who still want to enjoy various properties before they settle for the “one”, keep renting, enjoy the views and take your time. Sign up for Zumbly to start checking out our homes for rent and for sale.

Related: Is Buying a Home without a Realtor a Good Idea?

As the recession of 2008 closed out, the number of Americans renting absolutely skyrocketed. This surge came after a record-long period of renting decline from 1994 to 2004. Renting statistics show that it still remains a popular housing option in the United States. Even when homeownership continues to dip, renting remains a more affordable and flexible option. At Zumbly, we’re dedicated to helping you find the right living option for you. Here’s our guide to the difference between renting and buying a home.

Renting

A tenant pays for a rented property for as long as they occupy a space. The occupant and the property owner agree on an amount to put down on a lease agreement to be paid monthly. Apart from the monthly rate for the property, the lease also specifies a due date for the rent as well as renting rules and regulations.
Related: How Does Rent to Own Work in the Year 2019?

Homeownership

Homeownership is when someone purchases a house or pays periodic mortgage to acquire the house over a period of time. As people strive to attain financial freedom, a huge part of becoming financially stable is owning one’s home. 2019 has seen a dip in homeownership, but that doesn’t mean Americans are giving up on their dream homes.
It just means they have to find more ingenious ways to make that dream come true. Sometimes, renting is the right strategy.

Advantages of owning 

It’s private property

The privacy that comes with owning a home can be transformative for people who value security and self-sufficiency. While the law definitely provides for the reasonable expectation of privacy even for lessors and renters, renting property raises the chances of exposure to public scrutiny (read nosy neighbors) compared to living on privately owned property.

Incrementally grows in value as an asset

A house increases in value over time. In addition, you continue to build home equity as you continue to make mortgage payments. Building home equity means you have an equivalent financial stake in your home and, should you need to, you can use the equity to liquidate some cash.
To increase the equity of your home, begin by paying as large a down payment as you can. If you can surpass the 20% ceiling for conventional loans, do so and then focused on paying off the mortgage as fast as you can.

You can renovate


When you own your property you can renovate whenever you want to. Not only does can you convert your space into the home you’ve always been dreaming about, but renovations can also increase the overall property value. Rental houses rarely, if ever, allow renovations. You can tackle renovations gradually so they’re easier on the pockets and increase property value over a steady period of time.

Homeownership is more stable 

Once you have calculated the mortgage payments, you’ll have a predictable monthly figure for the duration of the mortgage. Unfortunately, rents are not as stable. Rent increases happen regularly as unwitting tenants get priced out, particularly in urban centers.
Another aspect of stability with homeownership is that once you buy a property, you become invested in the community around. A home can help foster a sense of pride and belonging.

Disadvantages of owning

It’s financially intensive

Owning a home is often a lifetime investment and commitment. The costs are always present whether you’re paying the mortgage, doing renovations, or simply keeping up with the regular maintenance of your home. A homeowner is responsible for minor repairs like a leaky faucet to the complete overhaul of the plumbing system. Unfortunately, despite the fact that mortgage payments are fixed, they’re also quite steep compared to rents.

Value growth is not immediate

Property doesn’t increase in value immediately. In fact, it can take several years or even longer. A homeowner needs to be okay with the lack of immediate equity gains. In fact, a new owner can expect to spend more than they’ll receive in value the first few years of ownership.
Related: Apartment Investing 101 – The Ultimate Guide

Advantages of renting

Renting is cheaper than owning (in the short term)

This is a short term reality. If you don’t have money to buy, renting allows you to live in a decent space that meets your needs at a fair price. Depending on the market, renting is generally cheaper compared to the payments you would have to make on mortgages of a similar property.
Besides, the rent payments include the additional utility costs that come with any building. The cost of a home does not include associated maintenance, taxes, and legal fees.

You can move

Renting allows one to move around more regularly, a useful benefit for picky renters and those whose jobs require moving around.  Leases are typically yearly contracts, so tenants have the flexibility to move away. Owning a home makes it exceptionally hard to change circumstances.

There are fewer responsibilities

The landlord is responsible for all the property costs, including property taxes and repairs for the property. If tenants avoid liability from purposeful or extensive property damage, they don’t have to worry about repairs and remodeling at all.

Disadvantages of renting

No tax breaks

Tenants aren’t entitled to tax breaks like homeowners are. Tenants also have no control over the rent fluctuations, which may leave them unable to afford living in the house. And unfortunately, rent fluctuations are tied strongly to inflation. The worse off the economy, the more unstable rent payments get.

Renting has rules

A tenant is subject to the rules and regulations put in place by the property owner. They cannot renovate or make any alterations to the house they occupy. Once you sign the lease agreement, you’re bound by the regulations stipulated within.

Choosing between renting and owning ultimately boils down to personal preference. For those interested in long term investments and permanence, owning is the right choice. But for those who still want to enjoy various properties before they settle for the “one”, keep renting, enjoy the views and take your time. Sign up for Zumbly to start checking out our homes for rent and for sale.
Related: Is Buying a Home without a Realtor a Good Idea?