Should You Rent or Buy Your Home?

6/10/2020 12:00:00 AM - 4 min. read

Should You Rent or Buy Your Home?

As of Spring 2020, the home ownership rate in the United States is just over 65%. And, while a home remains many Americans' most significant investment, many of them still wonder if renting is the better option. If you are looking at the pros and cons of home ownership, then we've got some expert advice to help. Our team has helped countless Texans realize the dream of home ownership and we are sharing what we’ve learned to help you make the right decision for your own family.


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Understanding Home Ownership Expenses

One problem is that many prospective homebuyers fail to account for some of the costs they are likely to encounter along the way. Comparing the monthly mortgage payment of a home against current rent prices in the same area is an excellent starting point, but it’s important to paint a complete picture when crunching the numbers. Renters won’t typically ever be asked to cover more than an agreed-upon amount along with some utilities over the course of their lease. Homeowners, however, may face some additional expenses over time. However, with proper planning and budgeting, these expenses can be managed fairly easily.

Here are some of the things to consider when trying to determine the true cost of owning your home:

  • Down payment, closing costs, and other mortgage fees
  • Home insurance, flood insurance, and private mortgage insurance (PMI)
  • Property taxes
  • Regular home maintenance
  • Pest control
  • Lawn care
  • Professional cleaning services


Consider Your Own Life Goals

Beyond cost, there are many other factors that can sway whether home ownership is the right step for you. One thing to ask yourself is how long you are planning to live in the same place. Since homes tend to appreciate over time, you can build more equity the longer you stay in the same place. Most advisors will recommend that homeowners stay in the same home at least 5 to 10 years to maximize the return on investment. Keep in mind, their home is the most significant investment most people ever make. It’s important to not only consider the cost of home ownership but to also weigh the reward. Even as markets fluctuate, there are benefits to owning your home.


Benefits of Home Ownership

There are many benefits to owning your home, and not all of them are financial. However, from an investing standpoint, home ownership is a tremendous opportunity. If your home is paid off, for example, you can continue living there without a monthly mortgage payment. All the while, your home’s value is likely appreciating, which means you are building wealth simply by staying put. If your home is paid off but you are ready to move on, selling it and keeping the profits can provide tax-free revenue up to $500,000 if you’ve lived there for at least two years. You can also turn your home into a rental property to earn extra income. Regardless of which route you take, you have several options that can point towards a brighter financial future.


Pro-Tip: Even if your home is not paid off, you can still tap into your home’s equity to borrow funds for anything from home repairs to debt consolidation to funding your retirement.


If your goals are less financial and more experiential in nature, you can still find what you’re looking for by owning your home - especially because there are several types of mortgages that cater to different needs. After all, financial and practical benefits are not mutually exclusive. Let’s take a look at some of the areas of overlap that make home ownership a great decision.



When paying on a mortgage, most experts agree that you should plan on living in your home for a minimum of five years before it makes good financial sense. If you’re looking to put down roots and start the next phase of life, buying a home is a great step in that direction. No more moving from one lease to the next every couple years!

Home ownership can also mean financial stability because the price of your home won’t change from month to month. Sure, things like taxes and insurance may fluctuate over time, but the price you are paying for your home won’t change – even if your home’s value increases.



You are going to have a landlord if you live somewhere that you do not own. The decisions you get to make about your own living space are likely to be limited, and, in fact, you may even be asked to make some changes that conflict with your own comfort or preferences. By not having ownership, you forfeit some of the control you might’ve had otherwise. For example, many places won’t allow tenants to own pets. If you owned your home, however, you would have the freedom to make decisions like these, as well as upgrades and improvements to your home as you see fit.

Similarly, if you are dealing with a landlord, your monthly living expenses are subject to change. You may enter into a lease initially, but once the term on that agreement has been completed, your landlord has every right to change the monthly rent s/he wants to charge. Those cost increases get passed down to you, the tenant. At times, you may even encounter a landlord who does not intend to renew a lease. This means that when your lease is up, you will be expected to vacate.



Ownership means being invested. This is true in a financial sense, of course, but there’s also something to be said for the regard a homeowner may feel for his/her community. By staking a claim and becoming an owner, a person is likely to feel a greater connection, deeper interest, and higher regard for the area where s/he has chosen to live.


Should You Look at Your Home as a Purchase or an Investment?

The difference between a purchase and an investment doesn’t have to be complicated. For the sake of this conversation, we are defining an investment as a purchase made with an intention of yielding some return in the future. Home ownership can be more expensive than renting, especially earlier on. However, with responsible home ownership, there is a very real chance of financial gain. With renting, the best you can really hope for is that you get your deposit back. For anyone focusing on their financial health, home ownership really is the easy choice to make.


Choosing the Right Lending Partner

If you are looking to make the move, it’s important to make sure that your mortgage is created with your goals in mind. Taking out a fixed, low-interest mortgage from a trusted financial institution is the best route. If home ownership is on the horizon, you need an experienced partner that can help you navigate the obstacles ahead. Remember, purchasing a home is possible, affordable, and hassle free with First Service.