Pros and Cons of Renting or Buying a Home

While there are exceptions to every rule, here are a few of the pros and cons of renting or buying:

Pros of renting a home:

• It’s relatively easy to move to a different address if you need to change locations
• Outside of rent, utilities, and insurance, you have few financial commitments to your home
• Unforeseen expenses, like a broken water heater or appliance, are usually the landlord’s responsibility
• You have a fixed monthly cost (potentially with annual adjustments)
• Major appliances are generally included in your rental

Cons of renting a home:

• You won’t build any equity – you can’t get any of your rent money back
• You have to pay a significant damage deposit before moving in (but will most likely get that back when you move out)
• Should your landlord need the space, you’ll have to find a new home (but your landlord will have to provide notice)
• Beyond minor cosmetics, you can’t make changes without the owner’s approval
• You might not be allowed to have a pet, and if you are, there might be additional costs and limitations

Pros of buying a home:

• Every payment you make brings you a step closer to owning your asset outright, and real estate historically appreciates (check out our Mortgage Calculator)
• You can build equity and gain access to more lending for things you want or to invest in your future
• You can change pretty much anything to suit your style
• Privacy — nobody can enter your space without your permission
• Stability — you can keep your address for the rest of your life

Cons of buying a home:

• It’s a process to move somewhere elst
• You’re responsible for everything — if the hot water tank bursts, you have to replace it
• Be aware of additional costs like property taxes, strata fees and house insurance
• High upfront costs, including legal fees, conveyancing, down payments, inspections, and more

Building your financial future

Whether you choose to rent or buy, the decision is a part of your financial future. In most cases, buying a home helps you build equity, while renting can free up some of your savings which you can use however you want, like investing in opportunities that are important to you. A professional advisor can help you make an informed decision that fits your comfort level, financial situation, and long-term goals.

Chat with a KSCU advisor for more information to see if renting or buying is the right fit for you.

When you’re part of Kootenay Savings, you’re a member and owner, with a voice and a vote, and we care about your financial well-being. Welcome to our community.