Renting vs. Buying a House: 5 Steps to Understand Which is Right for You
You might have asked whether buying or renting a house is better, especially after you have had a steady job for a while and are considering settling to start a family. You may prefer renting and have been living in a condominium for quite some time. However, you might have had some internal struggles about this. Should I buy a house or continue renting?
It depends on your lifestyle, preference, income, and budget. However, you don’t want to make the wrong decision. Looking back, you should be able to say that you have made the right choice. To avoid regrets and frustrations in your later life, we have included some factors you need to consider. We hope that they will be beneficial to you in making your decision.
Length of stay
If you are sure that you want to stay in a house for at least more than 4 or 5 years, then buying a home makes sense, especially if the place that you are seeing is a good fit for you. The good thing about owning a home is that you can make it feel personal by changing the look of the place that would suit your temperament. However, renting is the best option for a nomadic lifestyle.
Or perhaps you are expecting to get a job promotion or hoping to start your work on a brand new project that would require you to travel often across the country. In this case, you may not want to own a house but would prefer to rent. Selling a home can be a hassle if you buy it for the short term because of its costs.
Family status
If you are a young couple who have just gotten engaged or married and are not quite sure whether to have kids or not, your best bet would be to wait it out and see how life pans out. Kids in the family can change the whole dynamics of the situation. You don’t know yet how many kids you would want to have, in which case, deciding what type of house can be daunting.
If you are renting, that gives you time to look around and figure out the best locality to stay in or the number of rooms you may need in a house. It can also give you time to do comparison shopping and measure the housing market. To assess your situation, it may be a good idea to do a budgeting analysis and financial feasibility with Boulder property management companies services like Evernest, Home365 and APM.
Concerns about budget
If budget is your concern, buying a home can be more expensive than renting because of the initial costs involved, such as down payment, moving costs, closing costs, and renovations. Even if you can afford to buy a house, the daily running expenses of the house can add up. So, it would be best if you considered that.
If you own a house, you may not save in the interim, but you can in the long run because some tax implications are associated with being a homeowner. Once you have managed to pay off your mortgage, there can be significant savings even if you factor in the maintenance and renovation costs.
Advantages and disadvantages of renting
People have a misconception about renting that they throw away money monthly. But it’s a myth. You require a place you can call home where you live, and it costs you money. Granted, with monthly rents, you cannot build equity. However, even if you own a house, you cannot necessarily put away your entire income toward equity-building.
One of the disadvantages of renting is that renters may face rent hike-ups each time the tenancy agreement is up for annual renewal. These increases can be steeper for certain areas unless your rental home is that part of the town with rent control. Rent ceilings limit how much the rent can increase.
Advantages and disadvantages of owning
Homeownership can bring you both intangible and tangible benefits. Because you own your own home, you can change the layout, design, and look of the house. As a homeowner, you obtain stability and a sense of pride. The most significant tangible benefit is that you can enjoy certain tax deductions depending on where you live, saving you money in the long run.
The disadvantage is that the housing market may not be ripe enough when you decide to buy another house and move out. As a result, there is a possibility that you might lose some money. Moreover, there are high transaction costs with selling your home. All those costs associated with selling can add up to a large sum before you know it and dilute your gains, which may not be worth it.
