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Are you a long-time renter, intimidated to leap into homeownership? January is the perfect time to evaluate your current living situation and set new goals for the year, like deciding whether now’s the time to purchase a home. To help, we’ve provided a list of the pros and cons of renting vs. buying. This list will help you make an educated decision that aligns with your needs and helps set you up for the future.

The Pros of Renting


The most significant benefit to renting is the flexibility of moving and breaking leases with limited consequences. If you’re unsure whether you intend on staying in Portland for the next five or more years and want to be able to move quickly, renting will provide an easier out than buying a home. Another benefit is that you are not typically responsible for home repair costs, yard maintenance, or other expenditures as a renter. Lastly, renting may allow you to live in trendier neighborhoods with higher housing costs that may be out of your home purchasing budget.

The Cons of Renting


Housing flexibility, fewer home-related expenditures, and trendy neighborhoods sound great but renting also has many setbacks compared to buying. Lack of rent stability and price increases have become a considerable problem for renters post-pandemic. In 2023, Oregon landlords can increase rent by 14.6%, a 4.7% jump from 2022. If you paid $1,500 per month last year, your monthly rent could rise to $1,719 when your lease renews. That equates to an extra $2,628 in housing costs for the year. Of course, if you choose to continue renting, there’s also always the risk of tenancy termination. However, Portland has more protections for tenant rights than other areas of Oregon, including 90-day notices in the first year of renting. You can read more about tenancy terminations and evictions here.

The last significant renting con is the lack of equity growth. When you choose to rent, you choose to pay someone else’s mortgage. Over time you’ll gain no benefits for those payments, ultimately reducing your cash flow. For example, let’s say your monthly rent is still $1,500. Over five years, that equates to $90,000 that could have been used toward your own mortgage. The longer you rent, the less time you invest in your financial future.

The Pros of Homeownership

Homeownership comes with many freedoms that are difficult to have when renting. The first perk is home payment stability. Securing a fixed-rate mortgage allows for a predictable monthly payment throughout your loan’s life. If you’ve been living in apartments, purchasing a single-family home gives you new privacy with your own outdoor space and fewer neighbors. No landlords mean you can make your space uniquely you. You no longer have to stress about nails in the wall or switching out finishes. Owning your home gives you the freedom to make your space your own.

Buying also has financial benefits like tax deductions. You can often deduct your annual mortgage interest, mortgage insurance premium, and property taxes. If you have a fixer-upper, there’s an added incentive. Interest incurred on loans for renovation and construction can count toward your annual deductions. For more details on homeownership’s financial benefits like tax deductions and equity growth, check out the blog post, “Is It the Right Time to Buy?”.

The Cons of Homeownership


Obviously, homeownership is not perfect. The most significant drawbacks are related to the upfront investment. First, you must qualify for a mortgage loan or have cash for the purchase. This is often the largest deterrent for first-time homebuyers. However, many misconceptions exist about what you need to qualify and how much you need for your downpayment. Check out our “First-Time Homebuyer Myths” blog to learn more about downpayment costs and loan qualification.

The next home ownership drawback is property tax payments. Even with a fixed mortgage, your property taxes will fluctuate every year. Typically this is a minor increase, but it is something to be aware of. Owning your own home also means you’re responsible for all repair costs, scheduling, and maintenance. Being in charge of these tasks allows you to schedule on your own time frame and to your preferences but also increases the financial burden.

So what option is best for you? Buying a home is a relatively stable investment that will allow for equity growth over time and payment stability. On the other hand, renting is a better option for those needing moving flexibility or working toward saving for a short-term financial goal like a downpayment. If you plan on staying in an area for five years or more, we recommend contacting a lender for pre-qualification. Even if you’re not financially ready to buy, a good lender will help you build a plan to get there. Contact us to schedule a coffee date where we can share our preferred lenders and walk you through all you need to know about the home-buying process.

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