Buying vs Renting

To buy, or to rent — the question many of us ask ourselves at one point or another. Each person’s individual situation will vary, but there are some general guidelines you can consider when weighing your options.


How long are you planning to stay where you are?

Generally speaking, if you plan to live in an area for more than a few years, buying tends to be the way to go. While there are substantially more upfront costs to purchasing a home, if you plan to stay a while, these costs can be spread out over several years. The New York Times reports 5 years as the breakeven point when comparing renting to buying.

Planning to stay less than a couple years? Renting may be the way to go. You can assume little to no upkeep, and will avoid absorbing the closing costs of buying and selling a home, as well as paying capital gains taxes on the sale if you hold it for less than 2 years.


Consider your life stage and goals

Can you afford a home that will fit your lifestyle in the next few years, or will a tight budget limit your options?

While no one has a crystal ball, it’s important to evaluate your current life situation and how much it’s likely to change in the immediate future. When going through big life changes, such as divorce or downsizing, renting can be a way to decompress before making a large decision that may not be right for a new lifestyle. On the other hand, for those getting married or planning to have a child soon, you’ll want to look into properties you’re not going to quickly outgrow.

 
 
 

Buying

Advantages

  • May build equity and credit

  • No landlord to answer to

  • More stability (especially with schools)

  • Possible tax benefits

  • Can improve or upgrade home to your taste

  • 0% down payment options available

Disadvantages

  • Could lose money if home values decline

  • Extra expenses beyond mortgage payments

  • Rising home prices and low inventory in many markets

  • Responsible for repairs, remodeling

Renting

Advantages

  • Freedom to be more mobile

  • Not responsible for maintenance, repairs

  • Build credit (if your landlord reports rent payments to the credit bureaus)

  • No property tax bills

Disadvantages

  • Landlord can raise rent or sell the property

  • Choices may be limited depending on vacancies

  • Might have to move multiple times

  • Doesn’t build equity

  • No tax benefits

 
 

Ready to Get Started?

We’re ready to help!
Contact The Realty Shop today

Call: 314-372-0324

Email: info@realtyshopstl.com

Office: 8300 Eager Rd, Suite 603
Brentwood, MO 63144

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