It goes without saying that purchasing a home is a significant life decision, but is it right for you? Of course, there is no single correct answer because both renting and buying have advantages and disadvantages. Your personal finances, however, will play a major role in your final decision. Especially for younger people, renting seems to be a more cost-effective option.
That is not always the case, however. There are several lifestyle factors that can influence your decision, including how flexible you are, your career goals, and whether you want to own your own home.
If you’re debating whether to rent or buy, keep reading to find out what factors you should consider before making a decision.
Are Your Finances in Order?
If you decide to buy a home, make sure you have enough funds saved for your down payment, closing costs, and any unexpected expenses, such as home maintenance and repairs.
When you own a home, there is no landlord to call when something needs fixing; it is entirely up to you! You’ll need to plan for the unexpected, whether it’s plumbing problems, replacing appliances, repairing your roof, and the list goes on. In order to cover the maintenance costs that come with homeownership, you should save 1-3% of the purchase price of your home each year.
Buying a home is usually cheaper in the long run as well, and it offers you an opportunity to build equity. Your home will most likely have increased in value when you sell it, too.
Do You Plan on Staying Put?
What are your needs in terms of flexibility or establishing roots? If you intend to stay in one place for an extended period of time and are financially capable of doing so, purchasing a home makes the most sense. In return, the fact that you have the ability to make a home uniquely yours would make homeownership a better financial and emotional fit.
However, renting may be a better option if you prefer to be more flexible. If you are considering a job in another state, you wouldn’t want to deal with the stress of selling your home while relocating. Or if you are a newlywed and plan on having children in the near future, you may not want to buy a home just yet that wouldn’t accommodate a growing family.
Both of these situations could possibly be better served by renting so you can figure out what you need in a home, what your budget allows, and what kind of house fits your future lifestyle.
Are You Ready?
There isn’t always a simple answer to whether to rent or buy. Depending on your personal and financial circumstances, the answer may change over time. Rent-to-own properties are another option, where you begin renting and eventually become a homeowner.
Your financial status and lifestyle should guide whatever decision you make. Our Realtors are here to help. Reach out if you have more questions and if you are ready to make a move!