Rent or buy? Deciding Which is Right for You
The decision to rent or buy a property can sometimes be a difficult one. There isn’t just one correct choice it is a dynamic decision that is informed by where you are at this specific moment in your life. The right answer today can be completely difference from the right decision in a decade or even next year for that matter.
Well, this decision depends on your personal and financial situation along with the market trends and economic situation. In other words, the answer to your renting vs buying problem is that ‘it depends’. Both scenarios have advantages and disadvantages. So, before making any decision, you must first figure out what you really want and what you can afford. Before making any decision, you must consider these reality-based questions. You must ask yourself these questions.
- What is your current budget?
- What are your long-term career and family goals?
- How long do you want to live in the area?
- Do you prefer stability over flexibility or vice versa?
- Will you be able to pay for home repairs and maintenance?
- How much money you can invest?
Some people prefer renting a home due to budget restrictions and the increased flexibility. The initial investment cost such as the downpayment and closing costs can be an obstacle that prevents them from buying a home. Others prefer the flexibility that comes along with leasing. So here are the few benefits of renting that you should be aware of.
When you are living in a rental property, it’s a short-term commitment, tenants have the liberty to pack their bags and move into another house or apartment just by providing a short notice. You don’t need to worry about finding someone else to take over your lease, that’s the landlord’s job. So, this makes renting a flexible option. This suits best to young professional whose jobs might require them to relocate to different areas or retirees that are looking to slow travel.
Well, everyone wishes to live in a lavish, upscale housing society promising a luxurious lifestyle. Due to budget constraints, they can’t afford to buy a property with those amenities. Renting is a more affordable option when you want to live in an expensive housing market with lots of nearby amenities. Even you have limited funds, but you can live in a popular neighborhood and enjoy access to all the conveniences and little luxuries.
Leasing can also be less of a hassle because there is a ton less paperwork involved. All you need to just sign a tenant agreement which will protect your rights as tenant, submit a few financial documents. And you don’t have to pay property taxes. Repair and maintenance cost are the responsibility of the property manager or landlord there is no need to worry about a leaky faucet or overflowing toilet. A quick phone call to the super is typically the only effort required on your end. However, in case any damage, tenant will pay the certain amount of cost that depends on the damage or as specified in the tenancy agreement. Apart from paying the rent and utility bills, tenants don’t really have to worry about any other property-related costs. Whether it’s the insurance or property tax, the landlord is the one who is supposed to foot the bill.
Buying a home is a huge milestone in one’s life, which means you can’t make this decision on a whim. There are some benefits of buying a home. Owning a house gives you a sense of financial stability and security. You legally owned that property and no one can force you to move out. There is no need to fear of sudden increase in monthly rent. With the mortgage rates at a historically low rate, the amount is fixed which you pay until the end. Living in your own house you have the complete freedom. You can tear down the walls to extend your living room, paint the walls of your liking. You can update fixtures, change the décor, fix up the garden, keep the pet and even can-do major remodelling work to suit your personal style and needs.
You can utilize your home to generate income by renting it or adding an accessory dwelling. If you have some vacant space, you can simply rent it out and earn some extra income while maintaining ownership. A decision of buying a home is no doubt the biggest decision of your life and requires huge investment. But at the same time it comes with a lot of advantages like the sense of empowerment that it provides. You don’t have deal with landlord or a third party, you are free to make all their decisions on your own. Even if you want to move to another place. You can simply sell it out and you can make profit out of it and you can us that profit to buy another property. In other words, buying a home is akin to having a long-term saving account with higher appreciation rates.
At the end of the day choosing where you call home is a very personal choice. It depends on what your financial, social and professional circumstances are. As long as you are making a thoughtful decision that is based on what best fits your life at this time you will make the right one.
I'm Amanda and I love helping first time home buyers make their first home more affordable and I love helping sellers looking to move up to their forever home. Let me know how I can help you make your real estate dreams come true.
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