Moving out and getting your own place can be a big step on the road to full-fledged adulthood, but it can be confusing with so many options — not least whether to rent or to buy.

The renting vs buying debate isn’t going away any time soon, and there are people who swear by one or the other. You’ll need to work out which one works best for you. For everything you need to know about renting and buying your first property, keep reading below.

Cost of Renting vs Buying a House

When renting a place, it can seem like you’re just throwing money away, to live in a place that will never truly be yours. Whereas buying a home outright is perceived to be more of an investment, renting is surrounded by temporary connotations, and you might be tempted to look into online loans for both.

However, owning a house will force you to factor in expenses like property taxes, insurance and maintenance, while without a 20% down payment you’ll likely be making mortgage insurance payments. 

What About Tax?

You might think that you’ll benefit from tax savings due to the mortgage interest deduction if you own your house, but there are other factors to consider too. Try using a renting vs buying calculator to get some feedback tailored to your individual circumstances.

The cap on the amount of mortgage interest that can be deducted has decreased $1,000,000 to $750,000 — it’s also worth bearing in mind that your tax benefit might decrease each year if you have a large mortgage. At the same time, the additional costs of owning your home might increase if sudden maintenance is needed.

Your Life Plans

How long do you want to stay in the area? The process of buying and selling a home is more long-winded than the renting process, and various fees can add up too. If you’re going to stay in the house for a long time, you’re able to spread the costs out in a way you couldn’t if you were only living there for a year or two.

Generally, if you’re only planning on staying in a property for under three years, buying may not be the best decision for you. Perhaps the sort of place you can afford isn’t your dream property, or you’re saving to move to another area.

In these instances, the flexibility provided by renting can be helpful, as it gives you the freedom to move around a little more.

Renting vs Buying – What’s Right for You

There’s no concrete answer on the renting vs buying argument, as it depends on your individual circumstances. You should take into account the financial demands of both, but also what you want to do with your life, and who you are as a person. 

If you aren’t ready to settle down or want the freedom of not being tied to property ownership, you might consider renting. In contrast, if you’d rather make a long-term investment instead of giving money to a landlord each month, perhaps consider buying a property.

Managing your finances as a young professional can be tricky, so be sure to check out some of our other posts for more help!