Renting vs. Buying In Philadelphia

At least once a week I encounter a client who is weighing the pros and cons of renting versus buying Philadelphia real estate.  Unfortunately, there’s no formula or analysis that works for every individual, the decision whether to rent or buy must be made on a case by case basis because the process requires a very subjective weighing of pros and cons.  As the housing market crash of 2008 taught us, buying a home is not always the best option for every individual. Other factors also come down to your own life choices and priorities—if you’re planning a family in Philly, that’s different than those here for the city’s top employers.

Here is my best attempt to help with the decision of whether to buy or rent Philadelphia Real Estate.

Philadelphia Real Estate

Renting vs. Buying In Philadelphia

Let’s start with a few concrete laws:

  1. If you are unsure about the stability of your job DO NOT BUY, renting is the only sensible option for you.  If you are comfortable with your job stability then the home buying option is on the table.
  2. There are calculators and formulas that can help analyze whether it makes more sense to buy or rent in a particular city based on current economic conditions.  These are helpful but they don’t factor in all of the subjective elements listed below.  The numbers alone are not determinative.


Renting Philadelphia Real Estate – Pros and Cons

  • PRO – Renting requires a relatively small initial outlay of money. Most rentals in the Philadelphia require only first, last, and security deposit.  This is dramatically less that buying a home and the security deposit is returned if the property is left in good condition at move out.
  • PRO – Renting does not require a long term commitment.  Most leases in Philadelphia are for 12 months and then they either automatically renew or terminate.
  • PRO – Renting allows you the opportunity to familiarize yourself with one or multiple neighborhoods in Philadelphia before making a long term commitment to one.
  • PRO – Economic and housing markets don’t really affect renters.  Rents may go up slightly or down slightly but things like declining home values, under water mortgages and shadow inventory aren’t important to renters.
  • PRO – Renters don’t have to allocate money for annual repairs.
  • PRO- Renting a home is a quick process that typically takes 2-3 weeks total.
  • PRO – Renters don’t pay real estate taxes or worry about real estate tax hikes


  • CON – Renters have limited control over the property and the condition of the property they live in.
  • CON – Renters don’t build any equity in a home.  The entire monthly payment goes to the landlord.
  • CON – Renting is not a long term solution for most individuals.
  • CON – There are no tax deduction benefits for renters


Buying Philadelphia Real Estate – Pros and Cons

  • PRO – Buying Philadelphia Real Estate affords the buyer 100% control over the property.  If the owner is unhappy with the condition he or she can make alterations as desired.
  • PRO – Interest rates are historically low.
  • PRO – When you buy a home some portion of the monthly mortgage payment goes towards equity in the home.
  • PRO – Buyers are entitled to significant tax deductions for mortgage interest and depreciation.


  • CON – Buyers must allocate money for annual repairs
  • CON – Buying a home is a long process compared to renting.  The average home purchase takes 30-60 days.
  • CON – Buying requires a long term commitment.  In most cases the buyer should plan on owning the property for 5 years or longer.
  • CON – Buyers pay real estate taxes and face risk of annual increases

It’s easy to understand the difficulty clients encounter when deciding whether to rent or buy Philadelphia real estate.  At the end of the day there’s really no right or wrong answer, only what makes sense for an individual with a specific set of circumstances.

About The Author: Understanding Philadelphia Real Estate can seem daunting but is really pretty simple if you read and follow this advice. Philly real estate expert Frank L. DeFazio has extensive background in all types of Center City transactions: residential, commercial, leasing, sales, property management, investing, and real estate development. Frank L. DeFazio is the founder of the Center City Team in Philadelphia. He has an entire team dedicated to helping you make the right choice when buying a townhome or condo in Philly.

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