Renting

Buying

Advantages

Disadvantages

More fixed costs for the
term of the lease

Variable costs

Not gaining equity,
but not losing it either

Equity may go up, down, or stay stagnant

When the lease is up,
you can just move

If you want to move, home generally must be sold

There is generally less work in maintaining a home or apartment

Work needs to be done by you--or paid for by you

Smaller amount of "up-front" cash

Generally a larger initial investment--the downpayment

Disadvantages

Advantages

No matter what happens with the value of the home, you will never gain equity

Over time, the mortgage balance decreases and equity builds, even if the value of the home does not increase

Limited--or no--ability to personalize
your living quarters

The ability to remodel and redecorate the home to match your needs and desires

No tax advantage to renting. Your landlord gets any and all tax breaks that are available

There can be tax advantages attached to home ownership. Consult competant legal and/or accounting advice for details for your situation