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Renting vs Buying what's right for you

Renting vs Buying: What’s Right for You?

Aug 20, 2019

Homeownership has been framed as “The American Dream,” but it’s not the best fit for everyone. In fact, there are more people renting today than at any point in the previous 50 years! While there’s no definitive answer for choosing between renting vs buying a home, there is a ‘right for you’ answer. 

If you’re deciding between the two options, here are a few questions you should ask yourself.

What’s your top financial priority?

If your financial priority is to pay off debt or grow your savings, it’s important to understand that buying a home may slow your progress on reaching those goals. Any extra cash you have will either have to go towards your down payment or mortgage instead of paying down your debt or funding your retirement.

Carefully consider your current situation and decide which is more important to you. While buying a house may be important, it could be easier to achieve if you’re able to pay off outstanding debt first.

How long do I plan on living here?

Buying a home is a long game: the longer you’re able to stay there, the better the investment. It takes a lot of time, effort, and money to buy and sell a home so it only makes sense if you have plans on staying at least five years. You may want to calculate how long you’d have to stay in your home in order to break even on your initial costs.

How stable is your job and life?

We don’t have crystal balls to see into the future but think about how stable your job and life are. Are you working in an established and growing industry or do you experience spurts of activity? If you’re unsure where you’ll be in a year, renting will give you the flexibility to roll with changes than ownership is unable to. It’ll be a bonus to not be responsible for a sizable mortgage payment. Same with possible relocation.

How do monthly home costs & rent compare?

When comparing costs between renting and owning, don’t fall into the trap of just comparing rent and mortgage payments. There’s more to owning a home than just paying the mortgage. Make sure you consider all the costs of owning a home: property taxes, insurance, maintenance and repairs, and homeowner’s association fees, if applicable. Since your home will be larger than an apartment, your utility costs may be higher as well since you’ll also be responsible for water and garbage services.

Do you have savings for a down payment or closing costs?

You do need some savings to rent (at least enough to cover the security deposit and first month’s rent) but buying a home requires a larger amount of savings. While it’s possible to purchase a house with a down payment less than 20%, if you’re in a competitive market, it may put you in a better position if you have a higher down payment available. Having a higher down payment also means you’ll have lower mortgage payments and avoid paying private mortgage insurance.

Ultimately, buying a new home is a personal choice that can only be made after assessing your current circumstances. Take the time to educate yourself on the merits of both options and decide what makes sense for you.

If the signs point toward buying, visit to learn more about our new home communities in Lodi, Manteca, and Stockton.