Should I Own or Should I Rent?

Here is a common couple’s dilemma.  Toby and Linda married in 2005 and bought a house together.  Both names were on the deed and mortgage.  They married in 2012 and had two children together. They decided to separate a few years later.

Is owning the house or renting in either or both of their futures?

This answer is not final.  If you are divorcing, you may need to decide if you can afford to continue to own the house or rent instead.  On the other hand, you may be the spouse who will no longer own the marital residence.  With either situation, you may need to decide whether it makes sense to own or to rent for now or for the foreseeable future.  There are advantages and disadvantages for both of these choices.

Owning the marital residence gives you stability and familiarity for the children as well as control over your lifestyle.  You have the tax advantages of the deductibility of mortgage interest and property taxes.  Certainly the possibility of the property appreciating is a plus. 

Then again, you have all of the upkeep costs, such as landscaping, snow removal, all the repairs.  In addition, utilities, such as gas and electric, cost more and homeowner’s insurance costs more.

Renting, on the other hand, can give you more flexibility to move.  Your cash flow is better and you have more predictable housing costs. Any household repairs are the responsibility of the landlord.  Furthermore, not owning a house or condo/co-op, may mean that you don’t end up being “house rich and cash poor”. Your wealth is all in your house and you have no cash saved.

There are many emotional and economic concerns in deciding to own or rent.  It’s best to give both options critical and common sense evaluations before making a decision that is right for you at a particular time.