Rent Or Buy? 5 Things you should know before deciding.
When it comes to your next home, you'll have to choose between renting or buying. There are pros and cons to both to factor in. To help you make the best decision, here are things you should know before deciding whether to rent or buy your next home.
If you're like most people, you probably don't have a ton of extra cash lying around, some amount of debt and a decent but not so great credit score. If you're renting right now, is it time to buy or continue renting? So, when it comes to your next home or property, you'll likely have to choose between the cost of renting or buying. Of course, there are pros and cons to both options to factor in. To help you make the best decision for your situation, here are 5 things you should know before deciding whether to rent or buy your next home.
1. How Much Can You Afford and your Credit Score?
How much house can you afford is maybe the most important question to ask yourself before making a decision. Take a close look at your monthly budget and figure out how much you can afford to spend each month on housing and other things like maintenance, and property tax. Then, compare that number to the average cost of rent or a home mortgage in your desired area. Let's not forget closing costs. Closing costs are a big expense to remember and it's not just the monthly debt payments.
The next question is what is your credit score and debt to income ratio. This is a large factor and directly affects you buying a house since it can impact paying debt monthly. Mortgage lenders will keep a close eye on this one.
If buying is going to stress you out financially, then it's probably not the right option for you. On the other hand, if you're able to swing these homeownership costs, then it might be worth considering.
2. How Long Do You Plan on Staying in the Area?
Are you planning on moving soon? If so, then renting might be the better option than buying a house since you won't have to worry about homeownership and selling a house before you move. On the other hand, if you plan on staying put for at least a few years, then buying could make more sense since you'll have time to build equity in your home.
3. Are You Ready for the Responsibilities of Homeownership?
Owning a home comes with a lot of responsibility. Not only will you have a mortgage payment each month, but you'll also be responsible for things like yard work, maintenance costs and payments, property taxes, insurance property taxes, and house or property repairs. Don't forget there are the unplanned issues and come maintenance time it might not always work out for your current monthly expenses. If you're not ready to take on those homeownership responsibilities, then renting might be the better option for now.
4. What Kind of Lifestyle Do You Want?
Do you want the freedom to decorate and make changes to your living space? Do you like to customize your house or living space? Or do you prefer not having to worry about those things related to homeownership? If having more freedom and control over your living situation is important to you, then owning might be the way to go. However, if you'd rather not deal with those hassles, then renting could be a better fit.
5. What Are Your Priorities?
Ultimately, only YOU can decide whether renting or buying is right for your next home or property. It all comes down to what's most important to YOU and YOUR family. So, sit down and make a list of your priorities - financial stability, freedom and flexibility, low maintenance, etc. - and use that list to guide your decision-making process.
There's no right or wrong answer when it comes to deciding whether to rent or buy your next home. Some people say that renting waste money but it all depends on what's most important to YOU and YOUR family. Use this list of 5 things to consider as a starting point in your decision-making process and make a list of pros and cons and you'll be sure to end up in a place and with a property that's just right for YOU!
