Deciding whether to buy or rent mostly depends on whether you are financially ready to buy a house or is renting still the better choice? There are pros and cons to both options. A good real estate agent could assist you in making the decision that is best for you.
Buying vs Renting
When deciding to buy, one of the main factors that you have to put a lot of thought into is , whether you are ready to buy? This means that you have to consider whether you are out of debt, have emergency funds saved up, do you plan to stay in the same location for more than 3 years etc.
If you’ve read the previous blog post you’d remember that we mentioned that a house can accumulate equity. If you purchase a house you would be able to take advantage of the equity that the house generates over a period of time. This basically means that over the years if the value of your house has gone up, then you would be able to gain a higher return when it sells.
Even though renting for a long period of time wouldn’t be the ideal way of living in the long term, there are some instances where choosing to rent would be better than buying.
Debts & Savings
Like mentioned above you HAVE to consider if you have any debts or savings in case an emergency arises. If you have debts to pay off then you might want to rethink buying a house, in this case it would be better if you opt for renting. This would be the better option because while living on rent , you would be saving a lot of money when compared to buying a house. The money you saved by choosing to rent a house could be used to pay off your debts.
Savings is also a significant element that should be taken into consideration when deciding on which to do. For instance, if you had to quit your job, would you have enough saved in order to pay your monthly expenses when you purchase a house?
Home maintenance costs
A home usually requires constant maintenance and repairs over time, when you’re renting, it is usually the landlord’s responsibility to handle these costs. However, if you buy a house you have the full responsibility of ALL the costs that would incur.
When deciding whether to buy or rent you should also take into account if you would be able to keep up with these expenses. One of the biggest perks of renting is that you don’t have to spend on maintenance, even sudden repair costs !
It is recommended that you think of the maintenance and repair costs as well, even if you CAN afford to buy a house.
Type of job
If your job requires you to move around frequently then there is no doubt that renting is the best choice for you ! Or if you’re moving to an area that you are not familiar with & you aren’t sure if you would be comfortable living in the neighborhood, or if you have an unstable employment status the best option is to rent. If you wish for flexibility, then rent, because then it would be so much cheaper than buying a house and would also allow you to be flexible.
Buying a house would be worth it if you are able to live in it for at least 2-3 years minimum. Because you would have to invest a lot of money in order to buy a house, it is advisable if you are able to live in the house 2-3 years.
No one can predict the future, so it is best and vital to evaluate the situation you’re currently in and how much or how it could change in the future.
Buying a house is a long term commitment. Because of this reason you have to put a lot of thought into this decision, acting hastily is not a smart move. It is perfectly okay to live on rent till you have a solid plan.
However, if you choose to rent, it means you don’t have to commit to it for a long period of time. It gives you the opportunity to easily shift from one location to another.
Apart from the factors mentioned above, some of the other benefits and downsides to consider when buying or renting are;
Buying a House
- You have the freedom to renovate your home as you wish.
- You have more privacy.
- More stability.
- YOU OWN IT! IT’S YOURS! – no landlord to question you.
- Requires more money
- Increased expenses
- Responsibility of repairs and maintenance
Renting a House
- Freedom to be mobile
- No extra expenses like maintenance etc.
- Few paperwork compared to buying a house
- Rent rates could increase
- Little freedom to renovate
- Choices might be finite
- Does not build equity
The bottom line is, choose what’s right for YOU. Deciding whether to buy or rent is not an easy choice, it is best to consult a real estate agent who could assist you to make this decision.