Renting vs. Buying: How to Decide Which Option is Right for You

Although there isn’t a one-size-fits-all answer, there are some key indicators that can help you decide whether you should rent or buy.

It’s the real estate industry’s age-old debate: is it better to rent or to buy?

Depending on who you ask, it’s likely that you’ll get a different answer. There are a seemingly unlimited number of factors that determine whether buying or renting is the best option—at the end of the day, there’s no one-size-fits-all answer. But that doesn’t mean there aren’t a few key indicators that can help steer you in the right direction.

ESTATENVY recently spoke with John Astorina, a realtor with Keller Williams in Chicago, IL who has experience renting and selling properties, in order to identify the advantages and disadvantages that come with renting versus buying a home.

When to Rent:

Rentals are on the rise right now. Millennials—the largest generation of American consumers—are singing leases to rent apartments and homes instead of making the leap to buy. A lot of the time, that decision has to do with uncertainty. Renting is a better option when people are considering moving to a new place after a short amount of time, whereas buying tends to be better the longer you stay in one place. But the biggest factor playing a role in the home renting industry today is financial.

“There are a lot of recent college graduates who are deciding to rent. The reality is that millennials have a significant amount of student debt, which means they’re facing major roadblocks when it comes to buying a home,” said Astorina. “That’s where renting becomes advantageous—if your debt and income add up to a point where a mortgage payment isn’t viable or you’re worried about the upkeep costs that come with home ownership, then renting can be the best option.”

When to Buy:

On the flip side, buying offers prospective home owners multiple benefits. For the average bread and butter two bedroom, two bathroom living space in an established neighborhood, the cost of buying often becomes more affordable than the cost of rent while at the same time providing added perks.

“The goal for landlords is to pay their mortgage, taxes and expenses on a unit that they’re renting and then make money on it as well. It seems to me that you’re doing yourself a disservice by paying someone else’s mortgage when you could be paying your own,” Astorina said. “That then opens the door for you to reap benefits like tax deductions and building personal equity.”

Whether you rent or buy ultimately depends on your current general and financial situation. It’s important to go with the option that’s the right fit for you— at the end of the day, it’s a financial decision that can set the tone for years to come.