A prominent opportunity cost associated with housing choice involves location. For example, if I choose to live in Detroit, Michigan I am giving up my ability to live in Dallas, Texas. By choosing to live there, I am also giving up the advantages associated with living there, such as better education, less crime, lower taxes, and the like. However, by owning in Detroit, I am still reaping benefits such as: No rent payments, More luxurious living space, Freedom to be relatively loud without disturbing neighbors above or below me, More control over the design (I can paint my walls however I like) Unfortunately, by purchasing a home I am also subject to several disadvantages such as property taxes, and the cost of maintenance/upkeep (I now have a lawn to mow). If a school system is revered, the homes nearby will have inflated values because many people will want to live there so that they can send their children to the local school. In order to purchase a home, many people need to take out a home loan, or a mortgage. However, if that person has poor credit, they will have to pay a high interest rate on their mortgage. If they do not have very much income they may not be able to get a mortgage at all. Typically, discount points can be used to lower this interest rate, but someone with a poor credit score will need a large amount of points in order to make any significant difference. If you choose to rent a home you are giving up many of the benefits that come with home ownership. However, you are also giving up many of the disadvantages. By renting a place of residence, you no longer have to pay property taxes as you do not own the property. You also do not have to deal with the financing for the home. Ultimately, you will not get back all of the money you used to rent the place of residence, but with home ownership, you can usually sell the home to someone else and get most, if not all, of your money back