Should You Rent or Buy

Should you continue renting or buy a home? There are many variables that should be considered when making this decision. For many people the first thing that comes to mind is cost. More than just immediate cost prospective buyers should consider their upfront, ongoing, and hidden cost.

What is the upfront cost? The immediate cost when deciding to purchase may be greater than renting depending on your financing options and the current market trends. Buyers will have a few initial cost when purchasing a home: down payment, home inspection, insurance, property taxes, and closing cost. Check out our home buying guide for more information on this subject.When renting your immediate cost will be the application fee, security deposit, and first month’s rent.

You’ll also want to consider the ongoing cost: either the rent or mortgage payment. For many people, this cost may be close initially. If you plan on renting in the same area you’d like to purchase you may find that your monthly mortgage payments are close to the monthly rent. However, with a fixed rate mortgage your payments will remain the same for the life of the loan.  As you make mortgage payments any portion going towards the principle builds equity in your home.  Should you rent you may be subject to a rate increase each year or at the end of each lease term. After a few years of mortgage payments, you’ll have equity in your home whereas after years of renting you still have no ownership. After your loan is paid in full you will own your home outright, however, after 30 years of renting in year 31, you’ll continue to owe rent on the 1st of the month.

Finally, you’ll want to think about hidden cost. If you decide to rent you can call your landlord or property manager if/when something breaks or is damaged. For homeowners, they’ll need to budget for such repairs. At some point, appliances, heating and air systems, windows and roofs may need to be replaced. While some of these repairs may be costly, they can also be selling points should you decide to sell your house.

I’ve broken down a list of Pros and Cons to consider when weighing your options.

Ownership Advantages
  • Build home equity and wealth
  • You can take tax deductions
  • Your space, your rules (pets welcome)
  • Ability to remodel, customize, upgrade and update as you’ like
  • Pride of ownership
  • Mortgage can improve your credit history/score
  • Appreciate benefits, can borrow against your home (HELOC or cash-out)
  • Once paid off you’ll own it free and clear
  • Fixed mortgage stays the same as rent rises
  • Mortgages are historically the cheapest loans available
  • No landlord or management company to deal with
  • Can exclude capital gains when you sell (partially)
  • Inflation hedge
  • Forced savings
  • Leveraged investment
  • Can rent out to others
  • Can sell and use proceeds for bigger/better home
  • Retirement nest egg
  • It’s the American Dream!

Ownership Disadvantages
  • Home value may depreciate
  • Could overpay for your property
  • Obtaining a mortgage and finding a home can be time-consuming
  • You must pay taxes and homeowners insurance
  • Total housing payment can be more expensive
  • Sizable down payment  may be required
  • Maintenance costs can be excessive
  • HOA dues may be an added expense
  • Most follow HOA rules and regulations
  • Owning is a more long-term commitment
  • Increased liability and responsibility
  • Costs of selling is more than just hiring a moving company
  • Owning means, you’re responsible for all maintenance cost
  • Can be foreclosed

Rent Advantages
  • Possibly cheaper than a mortgage payment
  • Fewer or no maintenance cost
  • Lower upfront cost- no down payment required just security deposit
  • No property taxes
  • Fewer responsibilities
  • Less commitment (leases vary from month to month to several years)
  • No risk of home price depreciation
  • Some utility bills may be included
  • “Free” amenities such as pool, gym, security
  • Money can be used for other, more profitable investments
  • Can’t be foreclosed on
Rent Disadvantages
  • Rental payment may exceed monthly cost of mortgage
  • No ownership or wealth creation
  • Payments never stop when renting
  • Rent will increase over time, sometimes annually
  • Must deal with a landlord or management company
  • No tax benefits
  • Rules, regulations, and limitations (can’t paint, customize, maybe no pets allowed)
  • Less stability
  • Always at the mercy of the property owner
  • Can be evicted


Are you thinking about buying a home soon? Check out our Steps to Buying a Home Guide. Feel free to give me a call at 703-539-2053 or email [email protected] to schedule a private showing of this or any other property.


About the Author: The above article was written by Abraham Walker, Your Northern Virginia Real Estate Agent, helping clients market their homes to achieve high sales with a quick closing time is my main priority. He’s the co-founder of Ask A Walker and can be found on YouTube, Facebook, and HERE on this blog.

I can be reached via email at [email protected] or by phone at (703)539-2053. I’m happy to answer all your real estate questions.

I help people sell and buy real estate in the following Northern Virginia area cities & neighborhoods: Kingstowne, Island Creek, Cameron Station, Overlook, Alexandria, Old Town, Belle Haven, Fort Hunt, Mount Vernon, Springfield, West Springfield, Burke, Lorton, Woodbridge, Lake Ridge, Manassas, Annandale, Fairfax, Arlington, McLean, Reston, Herndon and of course Vienna.

If you found this post helpful please share it with others interested in keeping up with Northern Virginia real estate. Check back next month for an updated list.



Buying Vs Renting: Cost to Consider by Debbie Drummond

How to Save for a Down Payment by Kyle Hiscock

How Does Buying Rent to Own Work by Rochester Real Estate Blog

What Home Buyers Wish They Knew Beforehand by Lynn Pineda