Okay so it goes without saying that we here at @__myho__ are advocates for homeownership all day. The end goal should always be to own your ow #tilyouownyourownyoucantbefree. However, there are many instances in which renting makes more practical sense than buying a home. With that said, we want to present some things to consider when debating whether or not you should rent or buy. ALSO you should totally check out our season 1 episodes on our YouTube channel as we focused a lot on the differences between deciding to rent vs buy (link in bio). As for some things to consider….
1.) Costs: one of the major things to consider when trying to make a decision within the rent vs buy debate is the costs that’s associated with each option. Buying a house does indeed include higher upfront costs than renting. Between the down payment, various fees, closing costs, etc. there is a considerable amount of money that’s required in the beginning. When it comes to renting, you already know you’ll have to have the 1st and last month's’ rent and a security deposit. So that gives you a pretty solid indication of how much money you’ll need. It’s important to even consider the financial responsibility that’ll be required after moving in. Once you move into your property, there’s the possibility of dealing with maintenance repairs, property taxes, and just extra expenses past your monthly mortgage. Contrairly, renting typically comes with a fixed monthly rent and expenses and any repairs or maintenance concerns must be handled by the landlord.
2.) Affordability: one way to easily narrow down your decision is to determine how much house you can afford if you were to invest in a property. As mentioned above, buying a house comes with a lot of upfront costs: downpayment and closing costs are the most notable. Even after settlement, there are a lot of financial responsibilities that come with maintaining a house: property taxes, homeowners association fees, utilities, maintenance & repairs, and homeowners insurance to name a few. Take advantage of the many mortgage calculators out there to actually calculate if homeownership is in your price range of it the option automatically eliminates itself. Our fav mortgage calculators are Zillow, US Mortgage Calculator, CNN Money, and NerdWallet.
3.) Longevity: buying a home is a huge decision and is a great one to make if you anticipate being invested in that property for at least a few years. If you are looking for a more solid option and you’re confident that you’ll be in a certain area for the next couple of years, you should consider investing in a property. If you’re in a place in life where you’re looking for something a bit more temporary, renting is the rode for you.
4.) Flexibility: in short, if you’re looking for overall flexibility in not being tied down to a property, location, or mortgage, renting is the way to go. Having a month-to-month or yearly lease gives you the ability to be more fluid in your decisions, say if you get a job traveling, want to move to a new state, or get a new job in a different city! Financially, renting gives you more flexibility as well given there isn’t as much upfront costs associated with purchasing a property.
5.) Personal end goal: At the end of the day, this is a super condensed list of things to consider when debating between buying and renting. So many other factors come into play, such as timing, interest rates, and the real estate market in general. Timing is everything. The decision is ultimately up to you on where you decide to call home!