Not sure whether renting or buying makes the best sense for you. There is plenty to consider and go over. The 2 are entirely different, and they have their both pros and cons. Buying will always carry more risk and there is much more responsibility involved. However, it also does have its bonuses. You can reap the value of healthy asset increases. Nobody is going to look out for you more than yourself. So before you go out and make a purchasing decision, absorb some of the following topics that can help you along your way.
Your Financial Outlook
Think about your job and your income. When you buy a home, you need to be thinking long and hard about your personal financial position. You want to have enough money in savings to make your mortgage payment if you find yourself out of work. If you ask a professional, they will say you need many many months of savings. The more the better. But even a better question to assess is how skilled of individual are you? Are your job skills in high demand? If they are, then even if you do lose your job, you won’t be out of work for long. If your skills are obsolete, then you might want to reconsider a purchase. If your purchase doesn’t require a mortgage, then you will only be responsible for property taxes and any HOA fees. This puts you in a very favorable decision.
Here is a great financial calculator that will tell you what your mortgage payments are on a monthly basis.
How often do You Move
A home purchase is more geared for someone who is planning to stay in place for an extended period of time. You know your situation better than anybody. If your employer moves it’s employees around a lot, then renting might be the better option. Buying and selling a home usually doesn’t happen overnight. There are inspections, the need to find a buyer, plus many other circumstances which prolong a home sale. If you find yourself needing to sell fast, then this can put you in a position of weakness.
Renting has its own set of alternatives that deserve your consideration
Leave When You Like
When you rent, you can move whenever you like. Almost all leases have a clause that allows you to terminate the lease early. Although you may be required to pay a month of rent or two, that’s much easier than trying to exit a mortgage. Many potential people aren’t fond of renting because they think about living in an apartment. Yes, they don’t possess the square footage and privacy that homes do. But remember, you can also rent a home.
Rental Pricing of Popular Cities
A good comparison is to check the city you live in and view the average rates for apartment and private home rentals. You can gain rental reports online for many different cities. A good example can be found here.
Remember that pricing of rentals does and can change on a yearly basis. Then you can use this data in your purchasing decision. Pricing doesn’t include other fees like security deposits, pet fees, and other miscellaneous costs.
Avoid the High Investment Cost
Unless you are able to secure an interest only mortgage, or one that allows you to put zero down, you will need to come up with a substantial downpayment. Many professionals recommend somewhere between 10-20 percent. That can be a drain on your bank account. If you need to divert funds to other sources, renting might be perfect for you.
Have you considered owning investment property. This can be a great way to own property and make money at the same time. Why have a mortgage when you can have someone else pay it for you!