Renting vs Buying – That is the Question!
The majority of us start our lives by renting in hopes we can save enough money to buy our first place. Sometimes it seems like forever when we are contending with student loans or have a young, growing family. But which is better – to rent or to buy? This all depends on your circumstances and you may want to consider the following to help you choose.
When should you rent?
Here are some factors where it makes sense to rent.
Job instability
If your job is not stable or you can only find part-time work at this time. Then perhaps you should be looking at renting in the meantime until your circumstances change.
New in town
Perhaps your work has brought you to a new city where you will only be staying for a year or so. It might not be worth the investment if you are going to have to sell a residence within a year or less unless you want to use your residence later on as a rental property.
No down payment or savings
It is best to try to save first before making a major purchase like a house or condo. First time homebuyers are looked at critically by financial institutions and they prefer if you have at least 10% down payment; even though you can put as little as 5% down.
When should you buy?
If you plan on buying a home as an investment, you should also make sure that you are buying a home according to what you can afford.
Owning a home is forced savings
While most of us can put away money to get a home, over the years it is harder to save as unforeseen circumstances sometimes puts a detour into our savings plan. When you buy a home it is really a forced savings plan. It is easier for most of us to gather equity in a home than putting a few dollars in investments or a savings account.
Why contribute to someone else’s mortgage payments
Let’s face it when you are renting, that money is not really making any money for you. If you look at how much you will pay in rent vs. what your mortgage payments will be, most times it is best to buy.
Security
It often gives a sense of security owning your home because your landlord holds the cards for how long you will be residing there. You do not have a choice if your landlord suddenly decides to sell your rental unit and then you are scurrying to find another place to suit your needs.
Privacy and Freedom
If you are the type of person where you privacy matters, you may be better off owning your own place than renting. Your landlord can stop by at any time. If you want to paint your walls and install new carpeting, this is not always available to you if you are renting.
Investment
It is always a good investment to own property as your equity grows over time. You never know what the future brings for yourself or family. Knowing that in case of an emergency you have equity is very powerful. You may need that cushion for your children’s education or perhaps for your own medical needs or job loss.
No matter which route you take whether it is to rent or buy, always get the help of a trusted realtor. The Winch Walton Team can help you find what options are available in selling, buying or real estate investment options. Call the Winch Walton Team today to find the best real estate opportunity for you.