To rent or buy a house is a question that pops up when you feel comfortable about your stable income. You would definitely want to start building your wealth. Most people believe that owning a home is considered as an indicator of your status and it is the most financially beneficial goal.  This is because of the assumption that real estate prices only go up.   But the truth is the prices are dictated by supply and demand. So when there is boom time it is good to invest in buying properties.  But the rising home prices and mortgage costs makes it difficult for many to buy a house. If you do not have a stable or regular income it is better to rent a house as the payments towards down payment for home ownership and the mortgage instalments can eat up your income in addition to other expenses like taxes and other charges associated with home ownership. The money required for a mortgage is much more than what you would pay for renting a house. The difference amount if invested in other options like the stock market yields higher returns than owning a home which has been proved historically.  On the contrary, you can build equity in the property through down payment and the monthly mortgage payments.  Real estate investment are considered a great hedge against inflation.

The other factor affecting your decision whether to rent or buy a house is payment of taxes on the property. Being a renter you can claim tax credits as the tax impact is minimal for the renters.  But if you buy a house you must pay taxes on the property as it is an asset.  However you can deduct mortgage interest from your taxable income if the property is an investment.  At the time selling your house you can also claim exemption from capital gains taxes for $250,000 per individual or $500,000 for married couples. The mortgage payments help you to build equity in your house when the value of the house keeps increasing.  You also move towards home ownership when you make regular mortgage payments.  Owning a home offers you financial security. You have total control over the house to make any modifications or improvements and make additions. The other advantage of buying a house is that the bigger mortgage payments in the beginning years go towards your asset building which you may tend to spend on less important purposes if not invested in financial vehicles of high yield.

The advantage of renting a house is that you are liable to pay only the rent and for the utilities such as electricity and water etc while the landlord pays the taxes and for any repairs to the property.  You will have more disposable income than the homeowners with similar salaries. You do not also have the burden of a home loan.  But there is a risk of the landlord raising the rent or demand that you vacate the house at an unexpected time. To be able to make a decision, you have to weigh the advantages and disadvantages of both renting and buying a house against your financial situation to make an assessment.