Many people assume that there is a clear choice between renting and buying a house. The decision isn’t as clear as that. While there are benefits to buying, owning a home comes with its own problems. Renting also has pros and cons to consider.

Reasons to Buy Your Home

Buying a house is a good investment, especially if you buy while you’re still relatively young. If you can pay off your mortgage before you retire, then your household expenses will fall before your income does. You never have to worry about paying that monthly bill again.

Buying a home also gives you the opportunity to tap into its value. If you need extra money in the future, you can use your home as collateral. Having collateral usually means that you pay lower interest, which will help you save even more money.

Assuming that you get a fixed-rate mortgage when you buy your home, you know exactly how much you have to pay per month for the duration of your loan. That’s peace of mind that you don’t get when you rent.

Rental prices can go up quickly, leaving people wondering where they will live. Just look at the gentrification taking place in San Francisco. Thousands of renters have lost their homes because other people are willing to pay more money.

Other than some legal protection, renters can’t control how much they spend.

Reasons to Rent Your Home

Some economists point out that housing isn’t a very good investment. If that’s your only motivation, then you might want to consider renting. Since most people have to get mortgages to buy houses, they end up spending much more than their homes are actually worth. Even with an interest rate as low as four percent, you still end up paying about $5,000 per year on a 30-year loan for a $200,000.

In other words, you spend about $350,000 on a house that’s only worth $200,000.

For some people, it makes more sense to invest that money in something that yields higher returns.

When you rent, someone else has to worry about those problems. If the hot water heater breaks, the landlord pays to replace it. If a storm destroys the roof, the landlord has to deal with the insurance company. None of that is your responsibility.

In the end, there isn’t a clear choice when it comes to buying and owning property. Each person has to look at his or her expectations and income to decide.