Is It Better to Rent or Buy a House for Couples?
Buying a house is one of the biggest financial decisions couples make together. The choice between renting versus buying affects not just your monthly expenses, but your lifestyle, financial goals, and relationship dynamics.
So, is it better to rent or buy a house?
Conventional wisdom often pushes couples toward homeownership, but the reality is more nuanced – what works for one couple might be completely wrong for another. Neither choice is inherently right or wrong, but here's what to consider.
What Is the Difference Between a Mortgage and Rent?
A mortgage payment and rent are two fundamentally different approaches to housing.
When you pay monthly rent, you're essentially purchasing the right to live in a property for a specific time. Your monthly payment goes to your landlord, and your financial obligation ends there. The landlord handles maintenance, repairs, and property taxes.
In turn, a mortgage is a loan you take out to purchase a property. Your monthly mortgage payment typically includes things like the principal (paying down the actual loan amount), interest (the cost of borrowing), property taxes, and homeowner's insurance.
Unlike rent, a portion of each mortgage payment builds equity – your ownership stake in the property.
Marriage is typically correlated with higher rates of homeownership, but younger people – those below the age of 35 – are far more likely to rent than other age groups. 65.9% of this age group are renting instead of owning a home.
Pros of Renting
Renting has important advantages for some couples, particularly in terms of flexibility and financial predictability. Many couples find that renting aligns perfectly with their current life stage and financial goals.
More Flexibility
Renting gives couples the freedom to move quickly if they don't like something about their current place. Moving to another city for a job? Want to upgrade to a larger space? You can do so at the end of your lease term without the hassle of selling property.
If you and your partner are in growing careers or uncertain about your long-term location plans, then renting gives you much more flexibility than owning a home.
No Maintenance Costs or Repairs
When you rent, your landlord handles all repair and maintenance costs. A leaking roof, broken furnace, or malfunctioning appliance becomes your landlord's financial responsibility, not yours.
This predictability helps couples budget more effectively and avoid unexpected expenses that often burden homeowners. You just need to pay your security deposit and rent - that's it!
No Property Taxes
Property taxes are a big expense for homeowners, often running thousands of dollars annually. As a renter, you avoid this cost entirely. Your rent payment might indirectly include some property tax costs, but you're protected from tax increases and don't need to manage these payments yourself.
You might want to invest in renters insurance, though!
Why Might People Choose to Rent a Home Rather Than Buy a Home?
Couples often choose to rent when they want to avoid maintenance responsibilities or live in expensive housing markets. You might also do it to build your credit scores and save for a future down payment.
If you want to preserve your savings (or prioritize other investments that aren't homeownership) or test out different neighborhoods before committing to a permanent location, renting could also be a good option. Learn more about how unmarried couples can share finances.
Cons of Renting
Renting is a flexible option, but it comes with a few drawbacks that couples should consider. These disadvantages can impact both your finances and your sense of stability as a couple.
No Equity
When you pay rent, you're not building ownership in anything. Each monthly payment goes to your landlord rather than toward an asset you own. Over time, this means missing out on potential property value appreciation and the opportunity to build wealth through real estate.
For example, a couple paying $2,000 monthly in rent will spend $120,000 over five years with nothing to show for it beyond having had a place to live.
Lack of Control
Renting means living by someone else's rules.
You can't make major modifications to your living space, such as painting walls, renovating the kitchen, or adding a fence for your dog (if pets are even allowed in your rental). Some landlords even restrict minor changes like hanging pictures or changing light fixtures.
This lack of control can feel particularly restrictive for couples who want to create a space that truly feels like their own - especially if you have kids.
Rent Increases
Your housing costs can likely rise when your lease renews. Rent payments typically increase yearly, sometimes by substantial amounts in high-demand areas. You might start with affordable rent only to face steep increases that force you to move or stretch your budget uncomfortably thin.
Try these money tips for couples.
Is Renting Really Throwing Money Away?
There's a common claim that renting is "throwing money away," but this thinking oversimplifies a nuanced financial decision. Renting can be beneficial for some couples, even though you're not building home equity.
The money you spend on rent buys you flexibility, freedom from maintenance responsibilities, and the ability to live in locations you might not be able to afford to buy in. For many couples, these benefits are worth it - especially during certain life stages.
Pros of Buying a House
Homeownership has both financial benefits and the satisfaction of having a place to truly call your own. To buy, you need to spend a lot of money on your down payment and closing costs, but owning a home helps you build wealth and stability over time.
Building Equity
Each mortgage payment includes a portion that goes toward your home's principal. This gradually increases your ownership stake and helps couples build wealth over time as they pay down their loan balance.
This is important because real estate typically appreciates over the long term. A home purchased for $300,000 might be worth $400,000 or more after ten years, so you're building long-term wealth.
Control Over Your Space
Owning gives you complete freedom to customize your living space - you don't need permission from your landlord! Renovate the kitchen or add a deck, these decisions are entirely yours.
You can create a space that matches your lifestyle and preferences, and each improvement you make can potentially increase your home's value, too.
Tax Benefits
Homeownership may come with some tax deductions and advantages. You can typically deduct mortgage interest and property taxes on your federal tax return, but this is not tax advice and you should consult with a professional on what makes more financial sense.
Cons of Buying a House
Homeownership is a big step, so there are important drawbacks to consider. You and your partner should be emotionally and financially prepared for all the responsibilities.
High Upfront Costs
To buy a home, you need to make a big initial investment. Most lenders expect a down payment of 5-20% of the purchase price – on a $300,000 home, that means having $15,000 to $60,000 in cash ready. Beyond the down payment, you'll face closing costs ranging from 2-5% of the loan amount.
For many couples, accumulating these funds means years of saving and potentially postponing other financial goals. Try asking these financial questions before marriage to make sure you're on the same page.
Maintenance and Repair Expenses
When you rent, your landlord handles repairs. As homeowners, all house maintenance costs are your responsibility.
Some expenses are predictable, like regular HVAC servicing or gutter cleaning, but others can hit you out of nowhere. A failing water heater, a cracked foundation, a termite infestation - depending on the condition of your home, you may have to spend thousands of dollars every month to maintain it.
As The Couples Financial Coach, I always recommend couples to create a separate emergency fund for home maintenance and repairs.
Property Taxes and Insurance
Property taxes vary widely by location but often run several thousand dollars annually and typically increase over time. Homeowner's insurance is another required expense, and if you live in certain areas, you might need additional coverage for floods or earthquakes.
These costs continue even after you pay off your mortgage, creating a permanent expense that you'll need to factor into your long-term financial planning. You may also have to pay private mortgage insurance if you put less than 20% down.
Does Owning a Home Actually Save Money?
There's no one right answer! This heavily depends on your specific situation. In many markets, renting costs less than buying in the short term when you factor in mortgage payments, property taxes, insurance, maintenance, and other monthly costs.
Homeownership might not save you money in the short term, but it can make you more money over longer periods, as you build equity through mortgage payments and property appreciation. But this also ultimately depends on your local real estate market conditions.
So, Is It Better to Buy a House or Rent?
The choice between buying and renting comes with clear tradeoffs.
Buying builds equity and gives you significantly more control over your living space. You're getting an asset that appreciates over time (typically), and you may also benefit from tax advantages.
But you'll face high upfront costs and ongoing maintenance expenses. In some markets, selling a house if you ever want to move can be hard, too.
Renting gives you more flexibility and less responsibility. You'll avoid property taxes and can easily relocate for career opportunities. But you won't build equity, may face rent increases, and often need permission to customize your space. This can be difficult for families with children.
How to Decide Which One Is Right for You as a Couple
Before deciding if it's better to buy a house or rent an apartment, ask each other these three key questions.
What Is Your Money Situation?
You should take an honest look at your financial situation and stability as a couple. Beyond just having enough for a down payment, you need to consider your complete financial picture, including debt, savings, investments, and income security.
This helps prevent the stress of becoming "house poor" - where your home costs consume so much of your income that other financial goals become impossible.
Ask each other these questions:
"Do we have enough saved for a 20% down payment plus a house emergency fund?"
"Can we afford monthly mortgage payments with our combined take-home pay?"
"Are we prepared to spend 1-3% of the home's value on annual maintenance?"
"Do we have stable income sources that we expect to continue in the future?"
"Have we checked our credit scores and resolved any issues?"
You should also discuss whose name the house and mortgage are going to be in.
What Do You Have to Sacrifice?
Saving for a home requires trade-offs, both in terms of current lifestyle and other investments you could be making.
I'm not just talking about cutting back on lattes. Consider these lifestyle adjustments and investment opportunities you might have to temporarily cut back on:
New car purchases or upgrades
'Fun' spending like dining out and entertainment
Maxing out retirement accounts
Starting a business
Investing in stocks or index funds
Pursuing additional education or certifications
Contributing to high-yield savings accounts
Take an honest look at your financial picture and decide if homeownership is worth the trafe-offs for you.
What Works Best for You As a Couple?
This might be the most important question because it goes beyond numbers and into the heart of your relationship and shared vision for the future. What do YOU want your life together to be like?
Some couples feel more secure owning a home. Others find freedom in renting. There's no universal "right" answer, and you should make this decision with clear communication and a shared understanding of what matters most to you both.
FAQs
What Is the Main Reason to Avoid Renting to Own?
Rent-to-own agreements often come with unfavorable terms that benefit the seller more than the buyer. These contracts usually require you to pay above-market rent plus an additional premium that supposedly goes toward your future down payment. If you miss a payment or decide not to buy the house, you usually forfeit all of these extra payments.
You're also often responsible for maintenance and repairs during the rental period, so you're basically combining the worst aspects of both renting and buying.
What Is Equity in a Home?
Home equity is the portion of your property that you truly own. It's the difference between your home's current market value and what you still owe on your mortgage. For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, you have $100,000 in equity.
When Would Buying a House Make Financial Sense?
Buying a house makes financial sense when you plan to stay in one location for a long time, have a stable income to cover not just the mortgage but also maintenance and taxes, and have saved enough for a healthy down payment (plus have some left over for an emergency fund).
Your local housing market should also support buying – in some high-cost areas, renting might be much cheaper than buying a similar property.
How Can Buying a House Help You Build Wealth?
Homeownership can build wealth because homes typically appreciate over time. Each mortgage payment reduces your loan balance and increases your equity. And once you pay off your mortgage, you eliminate your largest monthly expense. This reduces your cost of living in retirement.
You can also potentially generate rental income from your property or use your home equity to secure good loan terms for other investments.
Get on the Same Page About Money with Your Partner
Making housing decisions as a couple comes down to open communication and aligned financial goals.
If you're struggling to agree, schedule a free consultation with me to create a joint vision and plan for financial prosperity.