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You must have asked yourself this question at some point. Is it better to buy or rent a house? The answer to this question depends on your unique situation. Imagine, after renting for so many years, you would look back and wish you had purchased a house. Or you might have bought a house but then regret your decision in the years to come.

According to a 2019 survey by Property Management, 64% of households in the U.S own their home. So, at a first glance, it may seem wiser to buy your own house to settle down or to achieve financial stability. But economists argue that Americans are wasting too much money on housing, while the interest rates are soaring. This can leave Americans ‘house poor’. The term house poor is used to describe a person who has mortgaged a house and lives in their own house but is left with very little to spend after making mortgage payments.

So, if you are mulling over the same question, then here is a guide that will help you figure out which one is better for you.

Questions to Ask Yourself

How are my Finances?

How much disposable income will you have left after paying your mortgage payment and other associated house costs? Simply calculate your net monthly income and subtract the direct and indirect costs associated with buying a house (i.e. mortgage, property tax, general maintenance and repair, etc.).

Based on this calculation, will the remaining amount cover your other expenses? Will you have additional savings every month?  As a rule of thumb, Mortgage companies will evaluate the “amount” of home you can afford based on your income, while the percentage varies from one market to another, your monthly mortgage payment should not exceed the threshold between 30% and 40% of your income. Just because you can be qualified for a higher priced home doesn’t mean its the right financial decision.

Other factors to consider are your lifestyle choices and spending habits. If buying a more expensive home will limit your lifestyle beyond what you are willing to accept you might regret this decision later. Buying a house for some could mean giving up their financial freedom. If you are not ready to live a frugal lifestyle, then renting might be a better option since oftentimes the cost of home ownership can exceed monthly rent. You may also consider buying a cheaper home that is more inline with your financial goals. 

As you consider purchasing a house, it is important to ask yourself, are you financially stable to make a home-buying decision? If you are job-hopping or have large debts to pay, you might not be ready to buy a house. Your financial situation is very relevant because mortgage companies will consider your income, credit score, and lifestyle when deciding your credit worthiness. The profit rates you’ll be offered depends on your financial situation. 

Can I afford to buy and keep a house?

Financially speaking, the cost of buying a house is not just the monthly mortgage payment. There are upfront costs including down payments and closing costs, then there are other recurring costs such as HOA dues, annual property taxes, insurance premiums, and maintenance and repair costs. So when considering purchasing a home, make sure to allocate a budget for these categories to ensure you aren’t blindsided later. 

When deciding on a home to buy, the physical condition of the home is very important. Most home owners will end up shelling thousands of dollars repairing roof leaks, replacing or repairing HVAC systems, addressing pest issues, or outsourcing the general yard and landscape maintenance. 

A potential benefit to renting is that you won’t have to worry about any of the above expenses as they will be handled by your landlord. If you are a person who doesn’t want to deal with home repair and maintenance then renting or purchasing an HOA managed condo might be the route for you. 

Am I ready to settle down?

This is a very important and personal question. Are you ready to buy a house and live the upcoming years of life in this house? Are you committed to living in this city for the foreseeable future? Do you have a plan in case you decide to move? (will you sell or rent the house?) If there is a lot of uncertainty in your life both on a personal and professional level, then adding a home purchase to the mix might make matters more complicated.

A home is an anchor that could weigh you down. For example if you are unhappy with your current job and are open to new opportunities, you might have to be open to relocating to another city. Owning a home in this case will make the transition much more complicated especially if you plan to sell. 

If you are ready to settle down, buying a house of your own is the way to go. Buying a house you can afford is a great step towards reaching financial freedom. 

Is buying a house my own decision?

The decision is yours when it comes to buying or renting. Obviously if you have a significant other and children, you’ll want to consult them to understand their needs and wants. For some, buying a house is a milestone in their life, for others, it’s their place where they call home. For first time home buyers, the processing can be daunting and stressful. A mistake many people make is making purchasing decisions under pressure. At the end of the day, you don’t want to be faced with buyer’s remorse later. 

At some point in our lives we’ll feel the desire to purchase a home, in a way your home is a representation of yourself and for some a source of validation. Unfortunately society makes us believe that we are failing at life if we don’t conform to the norms, in this case achieving home ownership and the American dream. It is important to keep in mind that you can pursue more lucrative investments with the same money that you are going to pay towards owning a house. 

Are there halal options in the market?

The good news is there are many avenues to purchase a home in a halal way. While we recommend you to do your due diligence, we’ve done a lot of the research for you. Feel free to check out our in depth evaluations of the top six halal financing organizations in the US as you shop and compare your mortgage options. 

Benefits of Renting a House


The biggest pro of living in a rental is having the freedom to move whenever you want. You can plan to study abroad, find a new job out of state, or simply pick up and go just because you can without having to wait to sell the house.

If you plan to move in the near future from the city you are living in, buying a house might turn into an inconvenience. Buying a house will naturally anchor you down. 

Low-cost and Hassle Free

Large down payments and monthly costs associated with home ownership can be very expensive as compared to renting. Renting offers a hassle free lifestyle where you won’t have to worry about home maintenance, repairs, taxes, etc. Just pay your rent on time and you will be good to go. 

Benefits of Buying a House

Building an Asset

In the short-term, mortgages are expensive and it might feel like you are paying much more than what the house is worth. But in the long-term a house is an asset that will help you secure your family and financial security. Land is one of the safest assets and the value of your home will continue to rise overtime as demand increases in your area. Renting naturally brings uncertainty. It is no secret that rental prices have increased significantly over the last decade. However home owners of the same period of time have maintained a consistent and predictable monthly mortgage payment all while the value of their home gradually increased increasing their equity. 

Mental Peace

Although economists argue that buying a house is not the best investment, it certainly feels more satisfying. It gives you immense peace living in your house knowing that you cannot be evicted one day if the landowner sells the property. Moving can be stressful especially if you are at a point in your life where you don’t have much time, such as caring for a newborn or building a business. 

Make Changes

Living in a rental, you will need permission from your landowner for every little change. Some rental agreements prohibit renters from getting a pet, painting walls, or getting more people to live with them. Having your own house offers you more flexibility and freedoms that a renter will never have.

Bottom Line

The ultimate decision of buying or renting a house depends on your financial and personal situation. If you are financially sound and ready to buy your own house, the next step is to find a halal mortgage company and start house hunting.