Before starting down your path to homeownership, take a moment to consider whether buying versus renting is the best path for you at this time in your life. Your finances, career goals, individual circumstances and lifestyle are all important factors to think about when selecting which path to take.
The financial part of the decision is actually the easiest to determine – numbers don’t lie. In the article referred to at the bottom of this post is a link to an online calculator to help you determine whether it is better for you to rent or to buy.
The tougher things to consider are related to career and lifestyle choices.
For instance, renting grants greater freedom to relocate in the event you want to change jobs or find a new living situation. However, renting is not an investment in the future. If you can see yourself staying in the same location for the foreseeable future (at least 5 years) and believe that monthly rent is a waste of your resources, then perhaps homeownership is the right path for you. If you feel that you may have to relocate in a couple of years, renting is probably the better path right now because of the extra costs of purchasing and then selling a home.
Owning versus renting can allow you to live in the neighborhood you desire rather than settling for where apartments or rental homes may be available. Many of IHA’s clients looking for homeownership opportunities cite the neighborhood as the reason they want to stop renting and to buy their own home.
Housing security is also a consideration. Just because the home you are renting is available this year, it may not be available next year. The owner could sell to someone that may not want to use the home as a rental. The owner of a home or apartment could also stop paying their mortgage and be forced into foreclosure, and ultimately your home or apartment could become owned by a bank that has no plans to continue leasing the unit until it is finally resold.
One of the best aspects of homeownership is the ability make your house your own. You can paint, landscape and remodel to fit your lifestyle. This isn’t always the case when renting which limits how comfortable and settled you may feel, especially if your landlord is slow to respond to maintenance requests. In your own home you wouldn’t think twice about taking care of a dripping faucet or a loose handrail right away, but you probably will not fix these annoyances yourself in a rental situation which can make you feel like you are living a less than perfect lifestyle.
There are many more pros and cons in both categories to consider. Here is one place to start your research: