Should You Rent or Buy a Home? The Benefits & Disadvantages of Each in 2023

Sep 11, 2023

We all need housing, which is why deciding between renting or buying is a decision many people have to make at some point in their lives. There is no correct answer to the question, as everyone is in a different situation. To help you choose the best course of action for your next housing decision, here are the pros and cons between renting or purchasing housing.



  • Flexibility: Renting gives you flexibility on where you live. Most leases last only a year, so this means renters typically can re-evaluate their living situation on a  yearly basis and decide if they want to move. This can be helpful if you need to move somewhere for a new job, found another place you'd prefer, or if rent rises beyond what you are comfortable paying. 
  • Limited responsibility: When renting, landlords cover maintenance, repairs, property taxes, and property insurance. This means if something goes wrong with your plumbing, electricity or something else along those lines, your landlord is the one responsible for ensuring it gets fixed. This doesn't mean that renters aren't responsible for the condition of their house or apartment. If you are the reason for something getting broken, you will likely be on the hook to pay for it and could lose your security deposit.
  • Amenities: Not all rental properties come with amenities, but a number of apartment complexes offer a variety of amenities including gyms, washing machines, a pool, and more.


  • No equity: Equity is essentially the amount of your home that you actually own. Your equity is the difference between what your home is worth and what you owe to your lender. As you continue to make your mortgage payments, your equity builds, therefore' increasing the amount of your home you own. When renting you are not building any equity. While your rent payments cover your housing, you don't actually own anything.  
  • Lack of control: This is true in a few different ways as a renter. As a renter you can't make any renovations to your living space without the approval of the landlord. You do not have control over the price of rent, as the landlord can choose to change it at the end of your lease. Your landlord also has the ability to stop renting to you at the conclusion of your lease.



  • Equity: A major benefit of buying is building equity. As you continue to pay off your mortgage and the value of your home increases, you'll gain more equity in the house. As your equity builds you'll be able to use it to take out a home equity loan, home equity line of credit or even use a cash-out refinance. The more equity you accrue, the more possibilities you have to tap into it for another big purchase.  
  • Tax Benefits: There are some tax advantages to owning a home. You may be eligible for deductions on interest paid, property taxes, and home improvements when you file each year.
  • Control: As the owner of the home, you have the ability to make the changes you want. You even have the option of renting it out to other people.


  • Stricter requirements: The barrier to entry for buying a home compared to renting is much higher. To qualify for a mortgage, you need to have a good credit score and debt-to-income ratio (DTI), and also need to make a down payment. For the down payment, there are options as low as 3% but a good goal to aim for is 20% of the purchase price up front. The higher your down payment is the lower your mortgage payments will be. With the median price home price in Philadelphia coming in at $210,000, this would mean you would need $6,300 for the minimum down payment of 3% or $42,000 saved to make a 20% down payment on a house that price.
  • Maintenance: Once you own a house, you are responsible for any necessary repairs and upkeep.
  • Limited flexibility: When you own a home, it becomes much more difficult to move because you have the responsibility of listing and selling the property, which can be a lengthy process.

There is no right or wrong answer as to whether you should be renting or buying your next home. Before deciding, you should meet with a US Department of Housing and Development (HUD) certified counselor to help you understand the process and help you find support. They could even potentially help you save money. You can find a HUD certified counselor near you by going to the link here. PFCU partners with Clarifi who is an excellent local HUD Certified Counseling Agency to consider.

By weighing these pros and cons, you'll be able to make a decision that works best for you and your family.  

Erin Elis 
Erin Ellis
Accredited Financial Counselor ®
Philadelphia Federal Credit Union
National Association of Federal Credit Unions 
PFCU is a proud member of the National Association of Federal Credit Unions
National Credit Union Administration 
Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.
Equal Housing Lender 
We do Business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

We provide links to external websites for your convenience. Philadelphia Federal Credit Union does not endorse and is not responsible for their content, links, privacy or securities policies.

Please note that the amount of money contained in your investment accounts are considered non-deposit products and therefore, are not NCUA insured, not credit union guaranteed, may lose value, are not guaranteed by any government agency. Securities, Financial Planning and Insurance products are offered through LPL Financial, and its affiliates, Member FINRA, SIPC. LPL Financial and Philadelphia Federal Credit Union are independent entities.