To Rent or Buy? There's More to It Than Money

After you have thoroughly researched the financial issues of the rent-versus-buy decision, let's look at the issue from a different perspective—one that involves emotional factors and persona subjective preferences that collectively determine the impact of your decision on your quality of life.

These "non-financial" issues are based on your personality, abilities, and values. They require careful consideration, beginning with this question: What attributes about the place you live in are most important to you?

Environment: City vs. Suburbs

The environment you choose to reside in plays a major role in your quality of life. Consider your personality. Do you like the character of the city, with its nightlife, quaint cafés, and diverse cultures, or do you prefer the safety, conformity, green space, and free parking in suburbia? Do you prefer to walk to work, take the subway, or ride the train? How important is privacy, and how far do you like to live from your neighbors?

If you can afford only those properties in environments that do not fit your preferences, you need to think about whether you are willing to forgo these preferences for the sake of owning a place.

Amenities vs. Customization

Dollar for dollar, renting generally offers a substantially greater number and variety of amenities than buying.

Consider, for example, the number of homes that come with an Olympic-sized swimming pool, clubhouse, tennis courts, basketball court, and an on-site gym. If you are looking to have these amenities in your private residence, get ready to spend a lot of money. Upscale apartment buildings, found in nearly every city, offer such options at a comparatively lower monthly rent than a mortgage for a property with the same attributes.

On the other side of the coin, there are affordable homes with private outdoor spaces that you can customize to your liking. There aren't many apartment buildings that come with acres of property in the country that will let you do your own landscaping, keep horses, or grow a garden.

Flexibility vs. Stability

Renting a place to live gives you significantly more freedom to get up and go at a moment's notice. The financial consequences of breaking a lease are minimal and can be addressed by simply writing a check. Homeowners wanting to leave their current residence face the much more complicated process of selling their property. The mortgage still needs to be paid, and the grass still needs to get cut while you are waiting to find a buyer. Unless money is no object, the transition to a new place of residence is likely to take months, not days.

On the other hand, with the flexibility of renting also comes some instability. The landlord can always raise the rent or ask you to move before you are ready to do so. If you own a house and make the payments, you can stay as long as you desire. Further, if you purchase a home with a fixed-term mortgage than your monthly housing costs will be relatively stable (excluding repairs or property tax increases). 

Personalized Aesthetics vs. Less Work

Buying a house gives you the opportunity to choose a unique and distinct architectural style and to personalize it. But this freedom comes with the responsibility of keeping up with maintenance and repairs. Homeowners simply can't avoid the need to cut the grass and fix leaky faucets.

If you prefer to spend your weekends relaxing in the park instead of wandering the aisles at the local hardware store, you might want to think twice about buying a home—unless, of course, you can budget a substantial amount of money to hire some help.

Although renting gives you no control over exterior aesthetics, you don't have to worry about dealing with wear and tear on your residence or problems resulting from bad construction. Renting still gives you plenty of opportunities to choose furnishings and decorate your interior environment in a manner that suits your style. And as a renter, all you have to do when something goes wrong is notify your landlord.

Emotional Satisfaction vs. Less Worry

Homeownership is often called "the American dream." There's just something emotionally appealing about putting down roots, getting involved in the community, and having a place to call your own.

Of course, homeowners also need to worry about the long-term character of the neighborhood and keep up with maintenance to sustain property values. If you are simply looking for a place to rest between days at work and nights hitting the town, renting may be the perfect answer. Just keep paying the rent and let somebody else do all the worrying.

The Bottom Line

Unlike the financial aspects of homeownership, the aspects that have a bearing on your lifestyle and values cannot be calculated online with some mathematical formula. If you can make the rent payments or qualify for the mortgage, you can live anywhere that you want to live. But buying a home is a decision you should take some time to consider, determining how its location, amenities, and need for repairs will affect your lifestyle and general emotional satisfaction.