Everyone needs a place to call home. At some point in life, moving from one place to another becomes an inevitable event. Perhaps you’ve outgrown a small space, or maybe a new job requires you to relocate. Where you live can have a big impact on your quality of life and sense of well-being. Moving can be an exciting adventure when you’ve taken the steps to understand your own housing needs.
The debate to buy or rent can be vexing, but the truth is, there are pros and cons to both. If you’re wondering whether to rent or buy, educating yourself with practical information can help determine which option is a better fit for you. Every situation is unique. You’ll feel confident when you’ve taken the time to establish short and long-term financial goals, propelling you toward the decision that will ensure your next home feels just right.
Here are eight factors to determine whether you should buy or rent your next home.
1) Purchasing a house is a large investment. If your situation allows you to make a long-term commitment, you can build financial equity when you take the leap into home ownership.
2) Potential tax breaks are one benefit of home ownership, but it is advisable to factor the cost of property taxes and maintenance into your annual budget. Home repairs can become costly and time-consuming. If you rent, ensure whether or not these costs and services are covered, and stated with clear writing, in the rental agreement.
3) Home ownership allows you the freedom to customize your space. Many rentals, however, frown upon stylistic changes. Knowing these limitations ahead of time can alleviate potential conflict and liability issues.
4) If your financial status allows you to make a large down payment, the resulting lower mortgage payments can save you money in the long run. However, down payments usually come out-of-pocket. Realistic financial planning that include your housing goals will ensure you make the right decision.
5) Life happens. Short-term housing needs might arise when life throws a curveball. Rentals can offer the freedom of immediate housing without a long-term commitment.
6) Housing prices can become unstable based on the market’s demand. Real estate prices typically veer within a predictable range over a longer period of time, but rental prices are inclined to fluctuate without warning. Establishing and sticking to your budget can be your best defense against market instability.
7) Don’t forget about insurance. In general, renter’s insurance costs less than homeowner’s insurance. Factoring this cost into your short-term and long-term goals will keep you on track.
8) Know the risks. Depending on the housing market, homes can be difficult to sell. Staying abreast of current trends will prevent you from market shock when it comes to your own investment.
Moving to your 'new place’ can be an exciting adventure when you feel confident and prepared. The debate to rent or buy doesn’t have to leave you stressed. Knowing the benefits of each and aligning your housing needs to realistic financial goals will ensure you have control of your money. If you’re ready for the next step and you’d like more information, contact one of our Housing Lenders at First Security Bank. FDIC, Equal Housing Lender