Buy vs Rent
Pros and Cons
It's always a debate whether buying a home is better than renting. If you seek low interest rates, affordability and stability, then buying a home could be a viable and rewarding option. However, continuing to rent depends on a potential homeowner’s individual circumstances. To help you understand the potential variables and evaluate your own situation, ask yourself important questions to consider as you make the buy-or-rent decision. Before starting your search though, make a list of the pros and cons that apply to you personally. Here's a few!
Food For Thought
Assume that you’re in a financial position to choose home ownership and you have good credit, not too much debt, a stable income, and adequate savings. If you should buy, how long are you planning to stay where you are? How often do home prices always go up? Are you throwing away money on rent? How much will you save on taxes? Are you comparing apples to apples? Either way, making an accurate comparison between the financial impact of renting and buying starts by factoring in the complete costs of home ownership. A quick rent vs. buy comparison could be done using the price-to-rent ratio.
If you decide that home ownership is right for you, start planning long before you’re ready to move and save money for a down payment, insurance and taxes. Ideally, you should also have at least six months of cash reserves to cover other expenses. Hire a real estate agent and get pre-approved for a loan to determine your target price range. Make sure every decision maker in your family is on board with the responsibilities of becoming a home owner. Then take the time to find a good neighborhood. Drive by at different hours to see what the area is like. Looking for a home can be stressful so be patient but the key it to be prepared and the right home will come along.
House Hunting Tips
Consider crime rate, noise levels and other potential issues when house hunting. Check proximity to work, schools and other regular locations. It’s not as easy to relocate once you’ve purchased a house, so make sure it’s the right place for you. Home ownership can be a practical and rewarding decision for both singles who rent and those with a family, as long as you are prepared for the responsibilities.