Renting vs. buying a house

Buying a home remains one of the most common ways to build equity. Equity is what you have when your home is worth more than you owe, which can happen over time as the home's value increases and as you pay the mortgage principal and interest down.

Interest paid on a home mortgage and property taxes may be tax-deductible. Speak with an accountant or financial advisor to understand the implications.

If you purchase a home, typically you have longer term plans to stay in a community. Owning a home helps you establish roots in the community and build relationships with neighbors.

Owning a home gives you the power to customize and upgrade your home to fit your needs and tastes, whereas you usually can't make home improvements or changes to a house rental, since it belongs to someone else.

Buying a home can almost immediately deplete your savings, as you typically need to make a sizeable down payment and pay moving and closing costs. According to Fidelity, you should consider your income, cash available for a down payment, credit score, and other debts very carefully, as well as consider how much you can afford.

Homeowners are responsible for the upkeep of their property, which can be time consuming if you handle your own repairs or costly if you pay a professional.

Unlike renters, homeowners must pay property taxes which continue even after your home is paid in full and often escalate over time.

You're typically not responsible for repairing or maintaining your property when you rent. When something breaks, your rental company or landlord is responsible for the repairs.

Renting allows you to try different types and sizes of homes, condos, and apartments. Renting also allows you to “try out” neighborhoods to see what you like, which could be especially helpful before buying.

Renting can be helpful if you have a job that requires you to move around, or if you think you'll move again in a short period of time. Most experts agree if you plan to move in three years, renting may be the best option for you now.

As a tenant, you won't have to pay thousands of dollars in closing costs before moving in. You're typically responsible for your first month's rent as well as a security deposit that may be refundable when you move out.

The amount you pay in rent can change every year or be less if you’re on a shorter-term lease. Plus, the rental market tends to ebb and flow, meaning what was once an affordable rental market when you moved the first time may not be as affordable if you decide to move.

When your lease is up, your landlord or rental company might not renew it, and then you'll have to move.

The decision to make improvements or renovations lie with the landlord or property owner. This may be a consideration if you have an interest in DIY or home improvement, or if you want the ability to make those decisions yourself.