Fun fact: did you know that about 34% of all Americans don’t actually own their homes? That’s right, that’s because those 34% of Americans are actually renting their home’s from a landlord who owns the home. In this article, we are going to talk about the difference between renting a home and buying a home, and the pros and cons of both.

To start off, let’s define what exactly it means to either rent or own a home. When you are renting a home, you basically are paying to have temprorary ownership over their property. Similarly to renting a movie, once your time expires, you return the possesion, which in this case is the home, with the option to extend your rental time. These contracts are called “leases” which are agreements over the amount of time one will be renting a home and the price they will pay for it.

On the contrary, when you buy or own a home you purchase a real estate property and become it’s legal owner and are responsible for paying the mortgage on the home (the monthly payment over time that you spend financing your payment on the home), unless you pay the total price upfront immediately after purchasing. As a landowner, you have the opportunity to rent out your house to renters, or tenants, who are looking to sign a lease to have temporary ownership of the property under your supervision. In return, they pay you monthly, which is why real estate is one of the most common investments today.

Now, to choose wheter or not to rent or buy a home, you have to evaluate your financial status and what you are looking to get out of your property. So, let’s break down the pros and cons of owning a home (which is the direct inverse of renting): When you buy a property, not only do you have not only more freedom and creativity to change the property as you wish, but you also gain a long term, relatively stable investment that gives you a strong flow of passive income. However, the cons of owning a home are less flexibility, more upfront costs, and maintenance and rennovation expenses that fall on your shoulders. 

Overall, owning and renting a home are both great options with pros and cons for each. Ultimately, to make the best decision it is important to evaluate your personal financial state and the life circumstances you currently are facing.