Buying vs renting a home is one of the biggest questions we hear in the real estate industry. The answer to this question depends on multiple, different factors & that is one of the reasons we hear this from our clients so often! In order to make a decision on this, you need to think about the following:
1. How long you plan to be in your location.
This is definitely the most important factor in deciding whether you want to buy or rent. If you are not planning on staying in your area for long, or if you are unsure of how long you'll be staying, renting may be your safer option. When you purchase a home, you should be planning on owning the home for at least 4 years. Any less than 4 years will put you at risk of not letting your home appreciate enough to cover the expenses needed to sell your home.
2. How much you can afford.
A lot of times when you go to research renting vs buying a home, you'll see that people say it is cheaper to buy a home than to rent one. Now it could be true that your monthly mortgage payment would be less than your current monthly rent, but you have to also consider the down payment, closing costs & your new monthly costs that'll be associated with owning a home. A down payment could range anywhere from 3%-20% of your home purchase price, so on a $200,000 that is somewhere between $6,000-40,000. Closing costs (which can include a survey cost, title insurance, origination fees, etc) can add up quickly as well, so it's important not to overlook them.. Private mortgage insurance, taxes, home owners insurance, and maintenance costs can also add on to your monthly costs.
3. What your goals are.
Maybe you've just graduated college and your goals are to start really saving your money and working on your credit score. Maybe you are hoping to make your money work for you, and earning equity in a home is exactly what you are looking to do. Whatever your goals, make sure you know them and use those to help guide your choices!
4. Whether having freedom with your space matters to you.
Everyone wants a space that they can call their "own," but this goes beyond your home feeling like home. Most rental agreements do not allow painting or altering the space, so if this is something that is important to you, you may want to consider purchasing a home. Do you have pets? Most rentals require hefty pet deposits & sometimes even monthly pet rent. Those costs can definitely add up, and that money may be better spent as a down payment for your next home.
If you can keep those four things in mind, then you will likely be able to answer whether it is time to buy a home or whether renting is the right option for you. Whichever one you choose, I can help you with renting and buying! Call me anytime for any of your real estate needs!
Check out my Facebook page for more information!: Alexis Knox - Realtor at TM5 Properties