Starting Your Property Search: The Key Differences Between Buying and Renting a House

The most obvious difference between buying and renting a home would be when you purchase a home, you own it. This means you would potentially be amassing equity since the home can increase in value. In turn, this would also increase the owner's net worth. When renting a home, it is not yours to own no matter how much rent you pay. (The only exception to this would be if you signed onto a rent to own lease where the rent serves as a down payment) You would also be paying rent perpetually. When buying a home and paying a monthly mortgage, you are paying off you loan and when the balance is zero, you will own the home free and clear.

Conversely, a renter could very well save a tremendous amount of equity if the price of real estate begins to decline. While it is most definitely true people increase their wealth through purchasing a home, that is only true if the value of the home increases. Unfortunately, this may not always be the case as real estate prices can decline.

For those that do not wish to settle in a particular area for a long-term period, renting may be the better option since the renter simply has to give notice to the landlord about moving. When you own a home, picking up and moving somewhere new isn't as easy, but the advantage is that if you make significant improvements to the home while you are living there, your next property valuation should reflect a return on your investment.

Regardless of whether or not you buy a home or rent a house, you will need home owner's insurance. When you own a home, you will find the rates on the insurance will remain relatively stable. For those who rent a house or flat, the rates may alter with every year.

Owning a home comes with a tremendous amount of costs and expenses. The reason this is so is that you will have all manner of maintenance and upkeep costs with a house. Well, such will be the case when you actually are the owner. For those who rent, many of these costs need to be incurred by the landlord. Depending upon the terms of your lease, the landlord may be responsible for the repairs and maintenance needed on the property. For renters, this could prove to be a great cost saver depending upon the scope of the work required on the property.

Whether you decide to buy a home or rent a house there are two drastically different approaches. One is not better than the other. They simply have different positives and negatives depending upon you own personal situation. Weighing such pros and cons of both approaches will greatly enhance your potential to make the right decision.