Can't decide whether you should continue to rent or go ahead & buy your first home? Is there really a difference? Let's weigh the pros & cons & see what makes most sense for you.

Monthly Payments
Let's start with the monthly payments. Let's say the home for Rent is around $1,500/month while the home for Sale is $1,286/month ($250,000 sale price). Obviously, your monthly payment saves you hundreds by buying rather than renting.

Down Payment
The standard for a rental is first & last month's payment plus a deposit. In this instance, we can just assume the deposit would be $500 (this will vary depending on your state) so your total down payment would be $3,500. A small initial payment with a refundable deposit however you may not get the deposit back at the end of your lease. It is ultimately to the landlord's discretion & what shape the rental is in by the end of your lease.

Using the $250,000 sale price your down payment for a home may be $25,000 (assuming you put 10% down). Remember, the more you put down, the closer you will be to paying off your loan. Of course, it is possible to put down less than 10%. Refer to your bank for their terms.

Variable vs Fixed
Most leases are signed for the minimum of a year. Once your lease term is up, your landlord has the right to increase your rent. If this is the case, the only option you have is to either move or pay the upcharge.

When you own your own home, monthly payments stay the same throughout the loan. Even if your home value goes up (or goes down) your payments will stay at a fixed rate.

With  rental, it is ultimately up to the landlord if he allows you to make renovations to the property. Typically, you will not be allowed to do any major renovations. Not to mention that you would ultimately be investing and improving someone else's property.

When you own your own home you can do whatever you want to your property. You can improve, renovate, and remodel to increase the value and customize it to your liking.

Here is the upside to being a renter. Typically, you are not responsible for maintenance. You simply notify the landlord if something is broken & it will be his responsibility to take care of it. You should keep in mind though that this means you are on someone else's time and may have to wait awhile for it to get taken care of.

Home-owners are responsible for their own repairs. Sticking to the $250,000 home example, you'd ideally have around $2,500 set aside for annual maintenance.

Flexibility vs Stability
A landlord can decide at a moment's notice to stop renting. You are ultimately at the mercy of a landlord. The upside to this though is that you won't have to deal with selling a home before moving.

Home-owners will have to deal with selling their home before being able to move. However, you have the security of knowing that you own your home and no one can evict you.

The Bottom Line
For every monthly payment you send your landlord, you get to live on someone else's property for another month.

Every time you send that check to the mortgage company, you own a little bit more of your home & are building your own equity as opposed to your landlord's. 


Many people are often intimidated at the prospect of owning a home. In the big picture, it is usually less expensive on a monthly basis & will end up building your personal equity in the long term. Don't believe us? Ask a home-owner. 9/10 will agree that it is one of the best investments they've ever made!