Whether ‘tis nobler in the mind to suffer the slings and arrows of homeownership, or to take pause against a sea of troubles and just rent.
Rent vs Buy
When it comes to buying, or renting a home, people today are having an increasingly difficult time deciding which path to take. Much like any other choice, each path has its pros and cons, but is there a clear winner? Here are the main factors I tell my clients to consider when choosing their path.
Since this is most people’s motivation or lack thereof for buying rather than renting, let’s talk about this first. Simply put, if you can afford to pay the rent, you can afford to buy, regarding monthly payments. In most of the country, renting is more expensive than buying after renting for more than two years. The true expense in buying a home is the down payment and the coinciding closing costs. Keep in mind, the down payment can be as little as 3.5% in some cases. There are also many home buying assistance programs we could talk about. Don’t sell yourself short and let money be the reason you think you can’t buy a home.
If you do not see yourself living in the same location for at least the next 5 years, rent. Short and simple. Like I mentioned in the previous paragraph, renting is a much better short term option with higher flexibility.
Life events are somewhat of a subcategory of Time. A life event can mean anything from getting a new job to adding another dependent to the roster. Consider what stage of life you’re in and where you will be in two, four, or six years.
Landlord vs. No Landlord
There are pros to having a landlord and there are cons. There is less responsibility on a renter’s part due to the landlord maintaining the home; however, you also must deal with the landlord. When you’re a homeowner, the responsibility is on you; however, you can fire a plumber, you can’t fire a landlord.
Money: Don’t let it be the deciding factor. Where there’s a will, there’s a way.
Time: Under 2 years, rent. Over 2 years, buying could be cheaper.
Life Events: Getting married, having children, new job?
Landlord vs No landlord: More responsibility vs less responsibility.