Most people, when asked whether it is better to buy or rent a place to live in, will answer that buying a home is preferential, without giving it a second thought.
While it may be true in most cases, each and every individual's situation needs to be thoroughly evaluated before making such statements.
Owning a home certainly opens you up to many more possibilities, as it's an investment for many years. It also allows you to go ahead and rent out your property to others, making for a great, stable source of passing income.
On the other hand, the internet is full of stories of people who have jumped on taking out a loan and buying their own place, without thinking to make sure whether they can actually afford it in the long term.
As they get caught in between not being able to make their mortgage payment and struggling to accommodate their budget to account for property taxes, many people start regretting this purchase in the first place.
The very first step you should take when considering buying a house is seeking the help of renowned realtors in your area, such as Richard Pattisall Real Estate or any other well-established, household name in your vicinity.
A good realtor will provide you with advice regarding the best options for you, as well as whether or not you should even apply for a mortgage loan in the first place.
Am I Better off Renting or Buying a House?
This is a very loaded question and its answer depends on your plans for the future, as well as your budget. The “rent vs buy” debacle has been the cause of many-a headaches.
Between evaluating mortgage interest rates, the final closing costs as well as the long-term maintenance expenses, it doesn't seem like being a homeowner is all that much better for your wallet than renting.
On the other hand, when you weigh out your monthly rent and compare it with the previously mentioned costs, you might be surprised at just how much money you'd save if you decided to purchase a home.
If you're looking for a place to settle down in for good, then the choice is pretty much a no-brainer.
Especially if you've got a spouse and the both of you have a steady income, then getting a mortgage will be quite easy and the costs associated with it won't be enough to deter you from the purchase.
If you're single, without a plan to start a family and an uncertain financial future, the last thing you'd want to do is accumulating debt.
Even if on paper, your credit would comfortably allow you to loan out the cash needed to buy a home. No matter how much certain mortgage agencies encourage you to do so, a house might not be that good of an investment as you might think.
In general, if you're still wondering whether to rent or buy, you should hold off with making the final decision until you evaluate at least these three key factors:
- state of your finances: if you have enough cash saved up to buy a home, then you're probably ready to do so. Without a mortgage holding you back, you can even get a return on your investment by renting the place out if you don't plan on living there indefinitely,
- personal situation: if your job requires you to travel around a lot, and you're not financially secure enough to allow yourself a home purchase just to rent it out to others, it might not be too wise to try and secure a loan,
- future: if you don't have a specified plan for the future of your property or aren't sure of how your life is going to pan out in 5 years, you might be better off renting for now.
Is it Smart to Rent Your House and Buy Another?
Visualizing yourself as a real estate tycoon with multiple properties around the globe and tens of thousands of dollars dropping into your account from renters is something that we've all been guilty of, at least once or twice.
The truth is that being a full-time landlord is not as sweet as it may seem. You'd have to deal with pesky renters, property tax laws, and other nasty issues that are all part of the job description.
However, if you are in a very comfortable financial spot and want to make the switch to passively earning your money, you should give it a serious thought.
After all, if you set the right rent amount and don't spend too much on repairs every year, you can find yourself buying and flipping apartments like it's your second nature.
In the meantime, the amounts of money coming in from all of your tenants will go into your children's college payments or your retirement!
Advantages of Renting
The main and most obvious advantage of renting vs buying a home is the fact that you are not tied down to a geographical location.
When renting a place, you can easily make life-changing decisions, without having to worry about what's going to happen to your property.
Be wary of the long-run consequences, though — you'll spend much more money if you rent indefinitely than you would if you had bought a place of your own, even with a mortgage.
Deciding whether to rent vs buy a place to live can be truly paralyzing. There are many factors to take into account, and naturally, you want to save as much money as possible.
If you're not one of those people who live a nomadic lifestyle and like moving from country to country, you shouldn't hold off with buying a home for too long.
Mortgage rates are usually lower than regular rent, and you won't really save too much money to become a potential buyer if you have to pay your landlord a thousand dollars every month.