At some point in your life, you will be faced with the decision of whether to buy or rent your home. Several factors go into this decision-making process, so don’t be in a rush. Factors like personal finances, building location, proximity to work, and duration of stay should be considered before making a decision. In recent times, fast-rising home prices has made it significantly cheaper to rent a home than to buy. However, that’s not to say that owning a home does not come with its benefits. Let us examine all the considerations to keep in mind before choosing the best option for you.
Duration of Stay
An important question to ask yourself is how long you intend to stay in the house. Experts advise that if you are certain about staying in a house for up to five years, buying a home could be a good choice. There is a limit to how you can customize a rented apartment to your taste, but you can put personal touches on your own home to make it feel like it’s yours. If your job requires you to move around a lot such that you never get to stay in one place for too long, renting is the better option because you don’t want to have to deal with the hassle of selling a home while transitioning to a new position.
The cost of selling a home within a few years after purchasing it is not worth the investment. In addition to the high closing costs, you will have to spend on repairs and renovations to increase your chances of selling the house for the best market price.
Buying a home is expensive because it includes making a down payment, closing costs, moving costs, renovations, and other home maintenance tasks. Renting a home does not require all these initial costs, and the landlord is responsible for maintenance and renovations. This comparison makes renting look like the better option for your finances, but buying a home can be cheaper in the long run because it offers you an opportunity to build equity. Your home is expected to increase in value over time, so it can serve as a worthwhile investment.
Weigh the Risks
Let’s examine the risks of renting or buying a home.
- You don’t get to build equity over time, and landlords tend to increase their rents with time.
- You cannot make drastic changes to the house, so it may not feel completely like home.
- The landlord has a right to evict you when he pleases.
- Families with kids often prefer stability or permanence that is lacking in a rented home
- Closing costs, which are charges paid to finalize a house purchase, can be very high.
- It is much more taxing to move from a privately owned house compared to a rented apartment.
- Although you build equity over time when you own a house, there is no guarantee that the value will increase or even remain the same. It can decrease depending on factors that you might not have control over.
- Homeowners tend to benefit from tax laws, but the recent tax laws could stand in the way of those benefits when finalizing a purchase.
- You are responsible for maintenance, repairs, and renovation costs.
If you’re curious about moving to a new home, Andraya Coulter offers the best deals for your home loans. Contact us now to get started!