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Comparison - Buying Or Renting

  Pros Cons
Note: Comparison is NOT an exhausitive list
Buying
  • Significant tax breaks on mortgage and property taxes
  • Potential tax-exemption on all or portion of capital gain on sale of property
  • Can be emotionally satisfying
  • Equity buildup which can be borrowed from to make capital improvements and potentially increase home value. Interest on such equity loans generally qualify for significant tax breaks
  • House investment can present a potential hedge against inflation
  • Property upkeep can be burdensome
  • Property tax increases can be a significant financial burden
  • Selling homes takes times. It is not as liquid an asset as stocks
Renting
  • Flexibility to move. Fixed assets like a house can take time to liquidate
  • Can invest in easily in other assets like stocks where returns could potentially investment in house
  • Significantly lower upkeep.
  • No capital outlay on upkeep of property
  • Rent increase can outpace inflation
  • Does not build equity
  • Tax breaks for home owners are usually higher than for other investments
  • Inability to make improvements. Most rentals restrict modifications - even put restrictions on painting, wall nailing, adopting pets,...
Nancy Castelino

Nancy Castelino
Real Estate Broker
Ph: (609) 466-2716
Nancy@NancyBrokerage.com