In my 35 years of life I have rented several times and have bought twice. When you’re in your twenties and trying to figure out life, most people have no choice but to rent. When you get an established job, settled down and married, and consider having children, people start to look into buying rather than renting (of course, not in all cases). Buying a house can be beneficial, especially in the long run, but it is not for everyone.
Here are some instances of when RENTING might be the better option for you:
- You Move A Lot. If you frequently change jobs and move a lot, renting is probably the best option for you. In most cases, buying a house is only beneficial if you can live there at least 2 or more year.
- You Live In An Expensive Area. If you live in an area with a high cost of living it may not be feasible to buy a place of your own. If buying a place would put you in a financial bind, then renting would make more sense.
- You Don’t Want The Responsibility. Homeownership requires hard work. You can’t just call up someone (i.e. the landlord) to fix everything thing that goes wrong. If something break, you are responsible, and most of the time repairs aren’t cheap.
- You’re Not Financially Ready. There are many expenses when initially buying a home. Not only do you need a down payment (preferably 20%), but you also have to pay earnest money (goes towards closing costs), closing costs, inspection fees, appraisal fees, moving costs, and any work that needs to be done on the house before moving in. You have to also keep in mind that you need to have decent credit to purchase a home. The mortgage company will review all of your finances, including any loans, open lines of credit, and all bank accounts. They will run a full credit report to review your credit history. This also plays a part in what kind of interest rate you will get. The better your credit, the better the rate.
Here are some instances of when BUYING might be the better option for you:
- You’re Financially Stable. If you have all of your “ducks in a row” with your finances, it might be better for you to buy. Buying a house is a great investment, as long as you can keep up financially. Once you pay off your mortgage and officially own your house, the value of your house is yours. Meaning, once it’s paid for and you decide to sell, all of the money you make will go into your pocket (unless, of course, you decide to buy something else).
- The Housing Market Is Good. Obviously if the housing market is bad, you would want to reconsider buying until it improves. When the housing market is good and interest rates are low, you may want to start looking.
- You Want Freedom. If you’re tired of living by someone else’s rules, then it might be time for you to buy. Buying a house allows you the freedom to do whatever you want. If you don’t like the deck off the back of the house, then you can change it. If you don’t like the exterior paint, then you can change it. If your landlord doesn’t’ allow pets, then you can buy your own house and have as many pets as you want.
Depending on your situation, it may be better for you to rent. Or maybe you’re ready to commit and buy a house of your own. I would make a list of the benefits and risks before doing either. Why have you decided to rent? Or buy?
Hope everyone has a great week!