In Michigan, as of 2022, 73% of people own their home*, which is about 11% higher than the national average. With that said, what are the pros and cons to both? Some say that renting is a waste of money, but it’s not without its benefits. On the flip side, there’s a sense of pride and ownership that investing in a property gives you. Let’s take a look through the differences:

RENTING

PROS

You have the ability to move after your agreed upon contract is up. You don’t have to worry about the logistics of selling the house, you can simply move on to the next location and housing situation. Some people even rent month to month for extra flexibility!

When you rent, your monthly expenses are fairly consistent (other than utilities, which are seasonal). Regardless of what happens at the property throughout the course of the month, your rent should be staying the same, which means you can budget a lot more accurately. Still, depending on the length and details of your rental agreement, keep in mind your landlord may decide to raise your rent.

When it comes to maintenance and repairs, you’re not responsible for any of that. Whether it’s replacing main appliances, plumbing issues, leaks in the roof, or remodeling, generally that’s all on the landlord. A portion of your rent may factor in maintenance, however, at the end of the day your landlord is legally required to maintain the property.

CONS

INABILITY TO MAKE LARGE ALTERATIONS

Because it’s a rented space, putting holes in walls, painting(although sometimes allowed as long as your repaint later), doing invasive or permanent construction projects, isn’t usually allowed. Also, any improvements you make will ultimately benefit your landlord when you move out. Still, there are a lot of “renter friendly” home decorating tips circulating around in this day and age.

LACK OF PERMANENCE

Depending on how long your rental period is, you’re only guaranteed to live in that place for as long as the contract holds up. The owner of the property could decide to sell to someone who’s not interested in continuing to rent out the space, or they could decide to raise your rent which could also put you in a position where you may want to leave.

BUYING

PROS

Probably the biggest pro to buying over renting is the fact that you’re putting money into your home that you can use or get back later. Often times the mortgage payment is significantly lower than rent would be. Additionally, if interest rates improve during the course of your loan, you may be able to refinance, which could save you money in the long run.

There’s something intangible about owning a home that makes you want to do more projects and take better care of it overall.

You have control over how long you’d like to reside in the property. Selling may be a hassle depending on the condition of the house, location, interest rates, etc., however, as long as you’re making payments on time, you get to decide if and when to list the property for sale.

CONS

RISK

Just because you buy your home at a certain price, doesn’t guarantee that the housing market will work in your favor when you want to sell. If you want to sell quickly, there’s always a chance that you won’t be able to get back what you put into it depending on where interest rates and the market are. That’s where having a great real estate agent comes in handy for things like pricing appropriately and negotiating when the time comes.

EXTRA EXPENSES

Here are a general list of expenses you have to deal with as a property owner that you wouldn’t necessarily have to worry about as a renter(depending on what your rental contract looks like):
• Homeowners insurance
• Pest control
• Tree trimming
• Pool cleaning
• Property taxes

The following may be covered but are sometimes required to be paid by renters as well:
• Water and sewage
• Trash pickup fees

SUMMARY

Overall, whether you rent or buy depends heavily on your life and financial situation as well as what you want out of the place that you’re living. Do you want a more hands on approach? Do you like customizing the place you live completely? Do you want to be able to pick up easily and move somewhere else? Do you want stable expenses every month? These are all questions you have to ask yourself.

Brass Lending CEO, AJ Sgroi, had this to say on renting vs. buying:

No matter what you choose to do, if you have any questions about renting or buying in your area, reach out to one of our experienced DOBI agents on our “Find an Agent” page.

*According to this study
Sources:
Worth Insurance
Fortune