Renting vs. Buying

In CT and NY, there are many good reasons for people to jump into the world of homeownership. For some, it’s family and stability; for others, it’s a great job or pride of ownership; or perhaps, it’s simply the rising costs of residential rents. At some point, most people will ask themselves whether they should consider buying a house or condominium, rather than renting.

The most essential factor is whether your career plans require a lot of flexibility. If you are in a highly mobile industry and are likely to relocate to another state or country in the next one to three years, and if you want to retain some financial flexibility, then you are better off renting. However, if you feel you would be able to forego selling the home when you move and instead keep it as a rental property, then buying could be very attractive.

If you want to maintain the option of renting out your home in the future, you should endeavor to keep your monthly fixed costs (mortgage principal and interest, taxes, insurance, condo fees) below the market rent you can expect. Ask the advice of a real estate agent who understands the rental prices and vacancy rates in the area or building where you are considering buying.

Benefits of Buying

  • Customization

    Whether it’s a new paint color or knocking down walls, it’s your house and you can do what you want.

  • Fixed Monthly Payment Option

    Depending on the type of mortgage you choose, you can have a fixed payment for up to 30 years. There’s no landlord to raise your rent.

  • Tax Advantages

    If you own the home as a personal residence, you could take a federal tax deduction for mortgage interest, property taxes and some of the costs involved in buying a home.

  • Appreciation

    Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®.

  • Equity

    Money paid for rent is money that you’ll never spend again, but a part of your mortgage payments lets you build equity in your home.

  • Predictability

    Unlike rent, your fixed-rate mortgage payments don’t rise over the years, so your housing costs may actually decline as you own the home longer; however, keep in mind that property taxes and insurance costs will likely increase.

  • Stability

    Living in one neighborhood for long enough allows you and your family time to build long-lasting relationships within the community.

Benefits of Renting

  • No Maintenance

    With a lot of rental units, especially apartment complexes and multifamily apartments, maintenance and repair is on the landlord or property manager, which means more free time for you.

  • Amenities

    Many apartment complexes and condos have pools, workout facilities, office space, and some even have grills and an outdoor television! Not a bad way to meet new people and use up the free time you’ve earned NOT mowing a lawn.

  • Keep Your Options Open

    We are living in an age where employment opportunities can take you to different sides of our country and across the continents. Not being tied to a mortgage gives space for another kind of freedom.

  • Save For a Down Payment

    Renting while saving for your dream home is a good plan of action but requires some direction. Talk to a mortgage broker and find out how much you will qualify for. This could save you major headaches down the road.

  • Less Risk

    Some people opt to rent because they simply do not want to take the risks of investing their money in real estate, even their own real estate. That’s cool too. When you’re ready, you’ll know it.

  • Discover Neighborhoods

    Renting allows you to get a lay of the land while not totally committing. While you’re discovering your new town or city, consider living downtown and enjoying all of the great restaurants and shops your town offers.

  • Stability

    Living in one neighborhood for long enough allows you and your family time to build long-lasting relationships within the community.