It is a major life decision to buy a home, but is it the right decision for you now? While there are many benefits of purchasing a home it is one of the largest expenses you will pay for and often renting a home is more feasible for a person's current financial situation.
If you are on the fence about both of these options there are factors that you must consider:
Cost of Renting vs Buying
Many people confuse the ability to afford a mortgage with the ability to buy a home. Yes, you may be able to afford your monthly payments but have you factored in the many other costs associated with purchasing a home.
Some of which include:
Property Tax
House Insurance
Closing Costs
Moving Costs
Renovation Costs
Maintenance Expenses
Utility Expenses
While there are immense benefits of buying a home, such as building equity and possibly saving costs long term, you have to carefully assess your financial situation. You must ensure that you have the money to secure the mortgage and the money to afford all the expenses that come with buying and living in a property.
For many, renting for a period of time and saving their money to secure the house they want is more feasible and economical. Careful consideration of your finances is the first step to assessing which option is best for you in both the short and long term.
Timing
Buying a home is a major personal undertaking and it is vital that you confirm that this is the best time for you to purchase a house. This relies heavily on both internal and external factors such as:
- What is the current state of the real estate market? Is it a buyer's market where the is a high volume of properties on the market but a shortage of buyers? Or a seller’s market? Where there is a high volume of buyers but a shortage of properties? The state of the market will affect the costs of properties and in some cases, it may be wise to wait a while till the market regulates itself.
- Flexibility: Are you ready to settle down with property or are you in the stage where your life where you prioritize other lifestyle factors such as travel? Perhaps your job involves travel or the possibility of relocation? Depending on where you are in your life, it may not be the best time to make such a large purchase and renting would make the most sense.
- Societal Pressure: Do you feel financially and personally ready to buy a home? Or are you feeling pressure from others? Homebuying is a massive personal and financial responsibility, so you must ensure that you are resolute in your decision, noting the personal responsibility of home ownership.
- Responsibility: One major pro of renting is that you don’t take on the burden of the maintenance and upkeep of the property. Nor the associated expenses. This is a particular benefit for people who are living out of their childhood home for the first time or anyone who would prefer not to deal with those responsibilities just yet.
We are interested to know what factors made you decide to buy or rent? Tell us in the comments below!
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