Renting A Home Compared To Purchasing A Home

Recurring Costs

Renters and homeowners both incur recurring costs, and the most obvious and significant of these are the regular monthly rent or mortgage payments. Another category of recurring costs are utilities like water, electricity, trash, gas, and cable or internet packages. Utility costs usually do not vary much between renters and homeowners, although in some circumstances, landlords may agree to cover the costs of certain utilities for their tenants, which could save renters anywhere from twenty to two hundred dollars per month, depending on the arrangement. Finally, all homes require regular maintenance and repair. For renters, most of these costs are covered by the landlord. Homeowners, on the other hand, will need to pay for any services not covered by their insurance, and they will therefore usually pay more to maintain their home each year. However, renters face a major disadvantage in this category. When renewing a lease, it is possible for landlords to raise the cost of rent, forcing the tenant to choose between staying in the home or finding somewhere else to live. Homeownership has a comparative advantage here. As the mortgage gets paid down over time, the monthly interest costs begin to decline. And once the mortgage is finally paid off, a homeowner will only need to pay to maintain the property, no longer needing to send off a large mortgage check each month. So, in the short term, the monthly expenses of home ownership will typically be higher than what is paid by renters. However, in the long run, homeowners stand to save a considerable amount each month as their loans get paid down.

Continue reading to learn about the costs of relocating.