Should you rent or buy a house?

Determine what makes the most financial sense for your situation.

Houses with rent and buy signs

There are many factors to consider when deciding between renting vs. buying a home. Both options come with their fair share of financial implications so it’s important to understand the pros and cons of renting vs. buying a house prior to making a commitment.

Renting a home often provides more upfront financial flexibility, however, you will miss out on making a long-term investment. Buying a home typically allows you to build equity and reap tax benefits, but owning a home also comes with more responsibility and a greater upfront investment.

Here are common pros and cons for renting vs. buying a home.

rent or buy infographic

Renting pros
 

  • Smaller, one-time deposit
     

  • Limited financial liability
     

  • No property taxes
     

  • Fewer unexpected costs
     

  • Shorter-term commitment

Buying pros
 

  • Initial down payment goes toward purchase price
     

  • Money payments can build equity
     

  • Possible tax deductions and credits
     

  • Upgrade your home how you'd like
     

  • Potential for increased financial well-being
     

  • Typically more consistent monthly payments

Renting cons
 

  • Potential rent increases
     

  • Rent payments never stop
     

  • No long-term financial investment opportunity
     

  • More restrictions

Buying cons
 

  • Increased financial responsibility
     

  • Larger upfront investment
     

  • Potential instability in the housing market
     

  • Selling your home can be costly
     

  • Less flexibility when it comes time to move
     

  • Property taxes can be costly and fluctuate

Receive service tailored to your individual needs, and access to a broad spectrum of competitive mortgage options.

https://www.ameriprise.com/products/cash-cards-lending/home-loans _self
Rent or buy cost breakdowns infographic

Application fee

Security deposit

First and last month's rent

Pet deposit (if applicable)

Down payment

Closing costs

Agent commission

Inspection fee

Warranty

Rent

Renter's insurance

Amenities fee

Monthly pet fee (if applicable)

Property taxes

Homeowners insurance

Mortgage

Private mortgage insurance*

HOA fees (if applicable)

Home maintenance, repairs

*Only required if down payment is less than 20% or until homeowner has more than 20% of equity in their home.

Discuss renting vs. homeownership with an Ameriprise financial advisor

If you are deciding between renting and buying a home, an Ameriprise financial advisor can help you assess your current financial situation and determine which option may align better with your financial goals.

An Ameriprise financial advisor can help you navigate the options available when considering renting or buying a home.

Or, request an appointment online to speak with an advisor.

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At Ameriprise, the financial advice we give each of our clients is personalized, based on your goals and no one else's. 

If you know someone who could benefit from a conversation, please refer me.

Background and qualification information is available at FINRA's BrokerCheck website.

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This information is being provided only as a general source of information. The information is not intended to be used as the primary basis for investment decisions, nor should it be construed as a recommendation or advice designed to meet the particular needs of an individual investor. Please seek the advice of a financial advisor regarding your particular financial situation.
Ameriprise Financial cannot guarantee future financial results.
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.