Wondering if you should buy a house or rent one? It’s a question that people have been asking for decades, and often the trends seem to follow economic shifts, demographic changes, and the affordability of the housing market.
But your decision will ultimately come down to your lifestyle, your financial position, and your plans for the future.
Here are some of the questions you need to ask when you’re deciding which option is best for you.
1. Do You Plan to Stay in the Same Place?
Culturally, people are more nomadic than ever. With the rise of remote work, there’s an entire population of people who aren’t buying homes. They’re not even entering into long term lease agreements, because they can work from anywhere so they wander around from place to place.
So when you’re thinking about buying vs. renting, consider whether you love the city you’re living in. Will you want to be here for at least a few years?
If you know you’ll stay in a home for five years or more, buying probably makes the most sense because you’ll have a lot of stability and you can turn that home into a reflection of you. But, if you like to move every year or two and you get restless easily, renting might be better. While you can buy a home today and sell it in a year or two when you’re ready to move on, the financial advantages aren’t quite there the way they are when you hold onto your home for longer and build up some equity.
2. Is it Cheaper to Rent or to Buy?
This question depends on the market. It also depends on your financial foundation.
If you’re going to buy a home, you’ll need to have some money saved for a down payment. There are also expenses such as insurance, property taxes, and maintenance that you’ll need to consider. Closing costs will be several thousand dollars. You’ll need to have some money saved up if you want to buy, and you’ll have to understand that you are financially responsible for everything that happens at the house. If the air conditioning breaks down, you need to fix it. If a water pipe breaks, you’ll need to find a plumber and pay for the repairs. You’re responsible for landscaping, pest control, and all cosmetic issues inside and outside.
Renting a home still requires a bit of money because you’ll need to put down a security deposit. Some landlords will require the first and last month’s rent to be paid before you move in. However, you won’t have to pay for homeowner’s insurance or budget for property taxes.
3. How Well Do You Handle Risk?
Risk will be present whether you buy or rent. You’ll need to decide what kind of risk is easiest for you to handle.
You have the opportunity to build equity when you own a home, and its value can be expected to increase. However, you can’t predict what the sales market will look like when you’re ready to sell. And, if you need to sell earlier than you planned, you might not get the price you need to really make any money.
The risk to renting is that you’re not using the money you pay in rent every month to build any equity. You also have to worry about how much your rent will increase year after year. Renting also puts a landlord or property manager between you and the home you’re living in. It’s hard to feel like you can be asked to move when your lease ends.
Talk to us about your goals and your financial position. We’ll help you decide whether you should rent or buy in the current market. Contact us at Oceans Managing Group at (386) 255-8585 or email with any questions or concerns you may have at firstname.lastname@example.org.