If you’re at a point in your life where you’re ready to move in with roommates but you’re grappling with the question of whether to rent or to buy, consider the pros and cons of either choice.
How Well Do You Know Your Potential Roommates?
Your level of risk is different when you’re sharing both the financial and maintenance responsibilities with others, and that difference is more pronounced when your roommates are not long-standing friends. Legal and financial obligations that can be seriously affected if one person backs out or otherwise fails to honor her end of the deal are more risky the less well you know the other person. So, consider the following differences between renting and buying in light of your potential roommates: are they tried and true and can you say with a good degree of certainty that they would or wouldn’t let you down? Or are they seemingly good people with good track records but you don’t know them really well as of yet? If you’re going to room with others in whom you have a great deal of confidence based on years of experience, then consider higher-risk scenarios. If your potential roommates are relatively new to you, then go with lower-risk options.
The Differences Between Renting and Buying
When you rent your home:
- Utilities may be included or they might be cheaper due to bulk rates for your building.
- Home maintenance is not your problem; it’s your landlord’s.
- You don’t have to worry about the value of your home going up or down.
When you buy your home:
- You can get tax breaks such as a deduction for mortgage interest.
- You can decorate and customize your house as you please.
- Having and paying down a mortgage can boost your credit rating.
- If your home appreciates in value, you’re building equity which can be cashed out upon sale or used for a loan in the future.
You can find further discussion of renting versus buying with roommates in “Rent or Buy: The Smart Science of Pooling Resources” on the blog, Women Living In Community. The blog is run by Marianne Kilkenny, a consultant, conference planner, group facilitator, and educator who advocates for shared community living for women in their fifties and beyond.