Renting vs. owning? Good question.

For many of us, home ownership pretty much defines the pursuit of happiness. But for some, renting is the smart way to live. Read on and decide whether you’re better suited to owning, renting – or staying put with your folks. (Good luck with that last one). Owning a home is one of the most exciting, rewarding life leaps you can take. But keep in mind a few pros and cons before you dive in:

Equity & tax benefits – a mortgage can be a tax write-off and as you build equity (the part of your home you actually own) your home can act like a savings account over time – and over long periods of time, it could rise in value. But unlike normal savings accounts, you can sleep in this one and it comes with a roof!

Stability – a home can provide a lot of psychological comfort. It’s yours (or, more accurately, will be at the end of your mortgage), so it really becomes something you’re attached to, something at the center your life. The phrase “Home Sweet Home”, doesn’t come out of nowhere.

Property taxes and other costs – Good schools, roads and such come with a price – property taxes. And of course, every repair and upgrade to your home is paid for by you. You can’t just call your superintendent – you are the superintendent!

Less Flexibility – If you want or need to move, you can only do so as quickly (and as profitably) as you can sell. And when you sell you have to pay a commission if you use a real estate agent.

The +’s and –‘s of renting – Renting can be a good fit for people not seeking long-term housing relationships, for whatever reason. It can also be good for future homeowners socking away a down payment. Whatever your motivation for renting, here are some pluses and minuses to consider.

Lower monthly payments – on average, you’ll pay less vs. a mortgage. That means you could save the difference.

Little responsibility – for fixing stuff, mowing grass and other chores. Your weekends are always free of these responsibilities.

No equity or tax benefits – sorry, those perks go to the landlord. You can never ‘recover’ your rent. Once it’s paid, it’s gone.

No control – over rent, paper-thin walls, general building condition, etc.

Calculate your living expense – Plenty of “rent vs. own” calculators are online to help you sort things out. Ultimately, your personal pursuit of happiness comes down to nitty-gritty details like your income, credit rating, debt ratio, job stability – fun things like that. Whatever you decide, make sure to do your “home” work. It is important that you save up for a healthy down payment. This helps give you more protection against any downturn in the value of your home and gets you owning your home sooner. And that’s one of the most comfortable feelings of all.

Tags: Homeownership, Mortgage, Own, Rent