Renting vs. Buying: Making the Decision That is Right for YOU!
Posted by semoninblog
When deciding to rent or buy your next home, you can research all you want when it comes to which is the better choice. Everyone has their opinions about which is the sensible decision when it comes to finances or convenience, however it ultimately comes down to which is the right choice for you. When comparing renting versus buying, there are a few important factors you should consider.
1. The first consideration of upmost importance is obviously money. Owning your own home is an investment in which you can develop equity, increase its net worth, and eventually resell it for profit. Renting on the other hand, offers no potential for return. Buying a home seems like a logical choice if you are thinking about the future. However, the future depends on your present. Home buying requires more financial stability and responsibility than renting. Some think that simply comparing monthly rent payments with mortgage payments is a good way to measure affordability. But owning a home can incur more unexpected expenses such as repairs, insurance, taxes, maintenance, and more. Being fully prepared for financial responsibility of owning a home is critical. If you feel that you are in a good place to make this investment, it is also important to analyze the current mortgage loan rates. If rates are high, renting for a few more years may make more sense, but if rates are lower than usual it may be a better time to buy.
2. The second factor to consider is your timeline. Do you see yourself living in your current city for a long time, or is it just temporary? If things in your life have the potential to change in the near future that will affect where you live, such as having kids or a change in your career, renting a home may be better for you. Buying a home and having to quickly resell can be a burden and not give you the time to develop the amount of equity that would make the purchase worthwhile.
3. Next, consider your overall lifestyle, flexibility and readiness. Do you travel a lot? Do you work—or perhaps play—for long hours, and your home is simply a place to sleep? Is there a chance you could get transferred or even lose your job? Owning a home requires a lot of time. If you do not have the time or energy it takes to maintain a home, it may make more sense to rent a place where the upkeep, maintenance and costly repairs are someone else’s responsibility. Neglecting a home you own could decrease the property’s net worth causing you to lose money rather than profit.
If you are not ready for home ownership, don’t get in over your head. There is no shame in renting. Both buying and renting have their advantages and disadvantages, but the choice that will be most beneficial is the one that fits your needs.