Are you weighing the pros and cons on renting versus buying? It is crucial to remember that this decision should not be made on a whim; it is a personal decision that should be thought out and well-planned. Here are a few tips to help you make the best decision for your current lifestyle.
Start by evaluating your financial situation. Compare all financial factors that go into buying a house vs. renting a house that are specifically tailored to you. You cannot just consider rent payment versus mortgage payment. You must take into consideration HOA dues, property taxes, utilities, landscaping, trash, and more. Additionally, you must consider what is important to you. Do you have kids and need to be in a particular school district? Maybe you need to consider your commute back and forth to work? What amenities does a neighborhood offer versus apartments or townhomes? When choosing the option that fits you best, it is important to remember that it is a personal decision made to tailor to your needs.
If you are choosing to buy, what are the expenses? Buying is not just getting approved for a home loan or a certain amount and then choosing a house. You should know that in order to get approved for a loan you will have a credit check for your credit score and your credit history. Furthermore, you must take into consideration down payment, closing cost, escrow money, moving fees, HOA dues, loan interest and more. You should do diligent research to understand costs and fees that will apply. Buying is a long-term commitment, unlike renting, you cannot pay a lump sum of money and break your lease and move on.
When choosing whether to rent or buy, you should know your plans for the future and the length of time you desire to stay in that home. Buying makes more sense to someone who intends on living in the same place for multiple years, if not for forever. However, renting is always an option and helpful for someone who is not ready for a long-term commitment, whether it be for financial or locational reasons.
On the other side, what fees are associated with renting? Renting can be just as complicated as buying. Renting will start with your credit score, and your rental history. Lack thereof, does not disqualify you from renting, but can make for larger fees due upfront. Security deposits, first and last month’s rent and utilities all go into the basics of renting from a reputable individual or company. When deciding where to rent- there are no stupid questions. You should consider asking how much the average utilities are, how frequently the trash runs, what are the amenities offered, and take into consideration the likelihood of receiving your security deposit back at the end of your lease. Just like buying, you still must consider your priorities and ensure you are renting in an area that is suitable for your needs.
Use our Rent vs. Buy calculator to assist you in weighing out the financial options. Before making a final decision, ensure you are doing what will work best for you, long-term. We are here to help guide you through this maze.