(May 8, 2025; Roseland, NJ) — Many struggle with the decision to buy or rent.
“The answer, of course, isn’t just based on financial factors, but also about lifestyle, flexibility and long-term goals,” says Leo Chubinishvili, CFP, with Access Wealth in Roseland, NJ. “However, it’s a question that our clients raise frequently regardless of their age or circumstances.”
Here, he says, are the pros and cons of buying:
Pros:
- A chance to build equity over time. Payments go towards your ownership, not your landlord’s pocket.
- Stability and control. There are no rent hikes or restrictions.
- Tax advantages. You have the potential for deductions on mortgage interest and property taxes.
- Hedge against inflation (when using a fixed rate mortgage)
Cons:
- Upfront costs that could be high, between the downpayment, closing costs, furnishing, etc.
- Ongoing maintenance and tax costs. You are responsible for repairs, replacements, breakage.
- Market risk. Real estate is historically a good investment, but there are no guarantees you won’t need to sell when values are low.
- Loss of flexibility. What if your job or family needs change?
Here are the pros and cons of renting:
Pros:
- Low upfront costs. Usually consists of a security deposit and the first month’s rent.
- No maintenance. Any repairs are the landlord’s headaches, not yours.
- Flexibility. Gives you the flexibility to move when personal or job needs change.
- More cash availability. Gives you the chance to invest elsewhere for better opportunities.
- No housing market risk.
Cons:
- No equity benefit. Monthly payments are a pure expense. You don’t build wealth over time.
- Limited tax benefit. There is no mortgage interest deduction.
- Limited control over the space. In most cases, there are certain do’s and don’ts that limit what you can to your apartment or home.
- Rent hikes. These can be significant and unexpected.
“No size fits all,” he says. “Any decision is very dependent on each person’s financial circumstances, the overall economy and the housing market. A financial advisor can help in running the numbers and helping you identify the best option.”
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