For many people and for many reasons, buying a home is better than renting a home.
In many communities, the inventory of houses to rent is limited, whereas there’s likely to be a large variety of houses on the market at many prices. If specific location matters, buying a house is the better way to choose the ideal location than renting a house.
Lifestyle is another major consideration. Owners can modify a house to suit their needs. A popular modification is making a house habitable by someone with disabilities. A renter would not be able to modify a house and a landlord is unlikely to change a house to suit a tenant. If a house needs updating, with new energy-efficient appliances, homeowners will update kitchen and laundry appliance, or put in a new furnace. In many neighborhoods, homeowners are converting to solar power too. Most landlords don’t often buy new appliances for their tenants.
Animal lovers can have pets. Landlords always have to think about keeping a rental property suitable for the next tenant. That often means excluding pets from a house that’s a rental property.
Homeowners call repair personnel as soon as it’s warranted. Depending upon the terms of the lease, a renter might have to call a distant landlord before obtaining permission for a major repair. In parts of the country subjected to severe weather, this can be a tremendous disadvantage.
One of the major reason most people choose to own instead of renting houses is for the tax deduction. Mortgage interest is deductible, as are property taxes. Modifying a house to be more energy-efficient can be tax-deductible too, depending on the year’s tax codes. The tax advantages are in effect for Federal and state taxes. Deductible mortgage interest is usually the largest deduction off the Federal income tax that people take. Renting offers no tax advantages. Rent paid for a home is not deductible.
The other major financial advantage to home ownership is that owning builds equity. Once a home is paid off, living there is essentially free, aside from upkeep and taxes. Some states have special programs that reduce property taxes for retired people, making owning even more financially attractive. With renting a home, there’s no equity; rent must always be paid.
After comparing the two ways of financing a house, it’s obvious that buying a house is superior to renting a house.