Buying vs. Renting: A Comparative Analysis

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Buying vs. Renting Introduction During the current economic recession, home prices have dropped considerably in the Atlanta area. Many believe that the market has bottomed out, making this the optimal time to purchase a home for prospective homeowners. However, the risk of a further market decline has made some consider renting as an alternative to buying for the time being. Thesis: Home ownership provides greater potential gains than renting, while renting provides superior financial flexibility. i. Cost Homes are typically the biggest purchases the average American will make in her lifetime. The average home mortgage requires a down payment equal to 20% of the purchase price. The remaining amount is paid monthly throughout the course of 30 years, on average. This makes the home mortgage a substantial and constant monthly expense for the average homeowner. (Egrungor & Zaman, 3). Renting is typically less expensive overall than owning a home. First, it does not require a substantial down payment, though it often requires a security deposit equal to 1-3 month's rent. Also, renters are not responsible for property taxes and repairs on the home, as homeowners are. Monthly rent is often cheaper than monthly mortgage payment, depending on the home and the property being rented. ii. Gains The most attractive benefit of owning a home is the equity one builds through mortgage payments. (Starobin). For the average person, equity in a home, a valuable asset usually

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