The decision to move is not an easy one to make, but there’s another choice that comes after that might be even more difficult: owning vs. renting. From afar, it seems like the two are pretty evenly split — both have their pros and cons, and both seem to be pretty popular among the general public. How are you supposed to know which is best for you? After weighing the benefits and the downsides of both and taking a look at the consensus, choosing a side in the owning vs. renting debate becomes a lot easier.
An Overview of Owning vs. Renting
Before getting into the right time to own vs. the right time to rent, it’s worth looking at an overview of the two and outlining exactly what the differences between them are (beyond the obvious, of course).
What Does Owning Entail?
People often mention owning a home when they mention freedom, and for a good reason: Owning provides the kind of freedom renters could only dream of. No more roommates, no more landlords, no more thin walls between you and your neighbors. Just you, totally independent in your very own home, and free to do whatever you want to do with your space without having to run it by the landlord or your roommate first.
Owning also comes with a whole slew of benefits that you just don’t get when you rent. Many of these are not necessarily physical, but still important — a feeling of stability and a sense of community, for starters, but also that special pride that comes along with owning something for yourself.
What Does Renting Entail?
The big thing that sets renting apart from owning is that, unlike owning, renting puts a set time limit on your stay that both the renter (also known as the tenant) and the lessor (also known as the landlord or super) agree on at signing. Typically contracted in twelve-month periods but occasionally seen in higher or lower increments, renting absolves you from any sort of penalties when the time comes to move again — after all, you agreed to your own move-out date when you moved in. Renters can either renew their lease or look for a new place after their rent agreement is up.
Renting also comes with several other advantages over owning. Homeowners sometimes deal with added expenses like repairs and upgrades that renters just won’t encounter — these are things that landlords are obligated to take care of. Occasionally, you’ll even have your utilities roped into the price of rent so that everything is included with one bill. Some places also include amenities such as a pool or a gym, making for added bonuses at no additional cost to you.
Owning vs. Renting: Where Should You Side?
With this important context, it’s now time to think about when owning makes the most sense and when renting makes the most sense. After all, an older teen in college might not be the best fit for homeownership, and a family of five might not be able to justify renting. Let’s break down the best option for your unique situation, whatever it may be.
When to Own
A home is typically considered the way to go for people who are trying to settle down, but that’s not to say that it’s impossible to buy a home and only live there for a short time. If you buy a home and decide you’d like to move, you can always just sell it, flip it, or even lease it out to renters. Not to mention, that overall independence, security, and peace of mind just doesn’t come with renting like it does with owning.
Owning is also best-suited for those who have a good amount of money saved up and are financially stable enough to handle a down payment or any emergency repair costs that might be thrown their way. A new roof or a new floor won’t come out of the landlord’s pocket; it will come out of yours. With that being said, though, there are government grants and other forms of assistance to help new homeowners pay for their down payment. Plus, there are often many state and local incentives that come with first-time home buying.
Not to mention, owning presents home owners with the unmissable opportunity to gain equity through their real estate. This investment in your own property, especially these days when mortgage rates continue to be lower than they’ve been in years, can be incredibly lucrative in the long run. In fact, equity is one of the most appealing, most unmissable parts of owning a home — and it’s something that renters will never be able to gain through renting.
When to Rent
Renting makes the most sense for those just starting out or those unsure of what the future holds for them beyond the next year or two. If you are not exactly sure about a long-term career path, a plan to start a family, or settling down and building a permanent homestead, then renting might be the better choice.
What’s the Consensus on Owning vs. Renting?
If you’re still unsure which one to choose, consider these statistics that reflect the public’s opinion here in the United States:
- In 2020, the national homeownership rate was 67.4% — this is over two-thirds of those surveyed, according to the U.S. Census Bureau.
- Pew Research recently found that, out of all the renters in the country, 65% of them are young adults.
- According to the same report, 42% of home buyers are between the ages of 45 and 64.
- The U.S. Census Bureau found that the median mortgage payment in the U.S. is $1,556. Compare this to the median price of rent, which is $1,160.
These numbers should help to paint a clearer picture of where people are at certain ages and how they lean in the owning vs. renting debate.
The Bottom Line: With Owning vs. Renting, Owning Triumphs
The choice between owning vs. renting seems to come down to where you’re at in life — financially, career-wise, or family-wise. Owning offers the most freedom and independence, plus it provides the owner with the invaluable opportunity to gain equity in their home. Owning also gives you the right to do whatever you please with your place, which will never happen with your rental. Plus, owning can be an investment, which is another thing that renters can’t find at their place. All of these factors combined with the many added benefits and forms of financial assistance that come with homeownership give owning the ultimate advantage over renting in the long haul.
If you decide to own, matching with a LemonBrew Partner Agent can help you find the right home. No matter if you’re owning or renting, the expert partner agents at LemonBrew have the expertise and the know-how to help you find the perfect place. Contact us today to learn more!