Renting vs Buying a Home: Pros and Cons

March 22, 2022

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I’m sure you’ve heard it before: “Don’t rent! You’re wasting your money!” It’s one of those age-old sayings that keeps repeating itself over and over again. But is that advice good for everyone? Or is it any good at all? Let’s explore the renting vs. buying a home debate and discuss some pros and cons along the way.

I took a deep dive into this topic in collaboration with my friend Justine Nelson over at Debt Free Millennials. I admire Justine’s mission to help everyone live debt-free and payment free so they can enjoy more today. To get more insight into renting vs buying a home, don't miss my take on YouTube as well as Justine's!

Okay, let’s jump into the pros and cons of renting vs buying a home.

The Pros and Cons of Renting vs Buying a Home

Too often, renting gets dismissed as something that people have to “grow” out of. But it might surprise you to know there are major benefits to renting. As someone who has done both–and often dreams about switching back to renting!–I want to lay out the different pros and cons to renting.

Pro #1:  Flexibility

Homeownership can be great, but renting gives you flexibility. You have the ability to change where you live after your lease is up. The changes can be big or small. You can change what type of housing you have or even change the city, state, or country you live in!

You can’t say the same for homeownership.

It's not just a mortgage, though that's certainly a big part of it. When you buy a home, you're stuck with a mortgage, homeowners insurance, property taxes, and maybe even PMI.

Plus, let's not forget about all those closing costs and fees. If you buy a home and want to sell a year or two later when you get bored of where you live, that’s not only cumbersome, but it’s cost-prohibitive as well. Those fees that you paid to buy a home? Guess what? They're waiting for you when you sell, too!

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Con #1:  Your Housing is Not Your Asset, It’s Your Landlords

When you rent, you’re giving money to your landlord each month. While there’s nothing wrong with that, it can be thought of as a con if you’re looking to grow your wealth and net worth.

The price of homes has grown immensely recently. By some reports, home prices rose almost 19% last year!

For homeowners, they are dancing in the streets as they see their net worth and home equity grow. People looking to become first-time homebuyers and renters aren’t dancing so much at this news. So yeah, that could be a big con for some. 

Pro #2:  Less Maintenance and More Chill

I’ve been a homeowner for 18 years now, and I’ll tell you the truth. I wish I was a renter sometimes. The amount of home maintenance and repairs I’ve had to do over that timeframe has been insane. 

I’m already longing for the day where I can become a renter again so I don’t have to:

  • Cut my lawn
  • Edge my lawn
  • Weed my lawn
  • Treat my lawn (See how annoying lawns are?)
  • Trim my trees
  • Repair or replace broken appliances
  • Replace my cracking driveway
  • Save up thousands of dollars to replace my roof
  • Paint my house

The list feels never-ending…probably because it is! My point is that all that home equity and net worth growth comes with work as well as costs!

Homeownership is a job. Full stop. If you don’t want another job, then you should think twice about it. 

With renting, when something breaks, your landlord should take care of it. There’s either no lawn to cut or it's taken care of by the landlord too. 

When you consider the time and cost of home maintenance and repairs, renting feels more relaxing to me!

Con #2:  Rent Can Increase, While a Mortgage Can Be Fixed

The national median rent increased by 10% in 2021, compared to the previous year.

Unless you’re in a rent-controlled housing situation, this can spell trouble for people who are looking to make ends meet and haven’t seen their incomes increase anywhere near that amount. 

One point for homeownership is that mortgage rates are crazy low right now and if you get a fixed-rate mortgage — my favorite is a 15-year mortgage so it can be eliminated from your life faster — you will have the same payment for 15 years!

Now, depending on where you live, your property taxes and homeowners insurance can and will increase over time. That means that the cost of owning a home does go up, but potentially not as much as an unexpected rent hike.

Pro #3:  You Don’t Need to Save a Home Down Payment

If you need a place to live, renting helps you find housing more quickly. You don’t need a down payment. Instead, you need a security deposit plus the first and next month's rent. 

For homeownership, traditional advice says a 20% down payment is a smart move when buying a home. For the average home buyer in America today, that would be around $60,000 for their $300,000 home. Of course, depending on the average price of a home where you live, that down payment could be less…or much, much more.

Is the traditional advice of 20% is too difficult to swallow? Don't worry. It is for most Americans. According to SmartAsset.com, of the US buyers who took out a mortgage, 55% made a down payment worth 6% or less of their home value.

So if you’re going for 6% for that home downpayment and your home is around $300,000, that is $18,000 instead of $30,000. 

When comparing this to the average apartment rent in the US, you’re closer to $1,100 per month. So that 2 month's security deposit would be $2,200 vs. an $18,000 home down payment.

Renting is the clear winner here in terms of the amount of money you have to scrape together to get yourself the keys to a new place.

Related Content: Is It Better to Save or Invest Your Home Down Payment Money?

Con #3:  Long Term Investment

Just like stocks and other assets, the longer you hold your home, the more wealth you’ll create. Even over the last 5 years, the median home price has increased by $100,000. 

I can attest to this. We bought our Michigan home for $350,000 in 2013 and 8 years later, it is valued at over $500,000. That’s a $150,000 increase in 8 years. Since we paid off our mortgage a few years ago, we now own our home outright. No mortgage principal payment, no interest. Yes, we still have to pay taxes and insurance, but I’m working on a plan for that too.

Of course, this varies where you live and when you buy. But in comparison to renting, statistically, homeownership does help you build wealth. 

For us, around 40% of our net worth is the value of our home. Now that’s not very liquid, but I really don’t care. We’ve got jobs we enjoy and enough investments to take care of our retirement needs 25 years from now. 

Our paid off house brings us pride and helps us rest easy as a solid long-term investment that will more than likely grow to around $800,000-$1,000,000 by the time we retire. At that point, we may just sell it and become renters so I don’t have to worry about cutting my lawn anymore!

Final Thoughts on Renting vs. Buying a Home

So is renting or buying a home the best way to go? Honestly, that decision is up to you. And it all depends on your stage and season in life. 

When I was in my early 20’s, I desperately wished I didn’t buy my home. I felt trapped. Homeownership costs ate up the majority of my income and homeownership duties took up most of my free time. 

No one wants to be house poor. It's incredibly stressful to send so much of your paycheck to your home and to also dedicate so much of your free time to it.

In my single time in my 20’s, all I wanted was freedom. As I learned, homeownership was the exact opposite of that. 

Even when I was ready to sell, the housing market tanked in Metro Detroit and my home value was less than what I owed! It was a $100,000 house with a $180,000 mortgage on it! That was a lesson in how quickly your home value can change and a reminder that it's important to build wealth beyond your property.

Fast forward to when I got married, and we started our family. All of a sudden, I really cared about school systems, communities, and laying down roots. I wanted to have a place for my kids to call home for good. 

And maybe when the kids are grown and gone, I’ll want to be a renter again. 

It all depends on your season in life. 

So the question isn't renting vs buying a home. It's actually, What season of life am I in now? In addition to making those considerations, you also want to remember that personal finance is rarely just a math problem. There are emotional considerations to make and personal and family situations to think through that can tip the scales in favor of renting or buying.


What do you think about this rent vs. buying a home debate? What are the pros and cons for you?

Please let us know in the comments below.


Andy Hill

Andy Hill is the award-winning writer, speaker and podcaster behind Marriage, Kids and Money - a platform dedicated to helping young families build wealth and thrive. Andy's advice and personal finance experience has been featured in major media outlets like Business Insider, MarketWatch, Kiplinger’s Personal Finance and NBC News. Trusted as a personal finance influencer and corporate financial wellness speaker by global brands like JLL, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys wrestling with his two kids, singing karaoke with his wife and watching Marvel movies.

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