It’s a big question! Hopefully, everyone will be in a position to answer this question for themselves at some time or another in their life. It’s one we get often, so we figured we’d take a few minutes to lay out some of the advice we generally give people.
The first thing you should know is, because of the varied complications and pricing that come with buying a house, the answer isn’t exactly set in stone. It can be difficult for the average buyer to decipher which is a better deal. It’s important to realize that the buyer’s personal situation is a huge deciding factor in whether to buy or rent, so do your research based on your own position.
In terms of buying a home, you’ll have an advantage when it comes to equity and security, and your home will serve as an asset for you financially. You’ll always be able to sell your house and depending on the work you’ve put into it, possibly for much more than you originally bought it for. In general, homes tend to appreciate over time, so you’re likely to earn a profit off the sale. However, depending on the interest rates for the area and other external factors, this isn’t necessarily a guarantee.
If you’re looking to move cities within the next three to five years, or aren’t sure how long you’d be staying in general, you risk that money when paying closing costs and other related fees. Of course, the largest barrier to entry when it comes to buying is the down payment. You’ll need savings upfront to even begin your home buying journey. Furthermore, consider how much time you’re willing to put into a property. Besides just money, houses are time-consuming purchases, and some will “cost” a lot more time than others.
As for renting, you are allowed more flexibility, and it isn’t as big of a commitment as purchasing a home. If you move around for your job or don’t want to settle in one spot for an extended period, renting might be a smarter option for you. Unlike owning a home, once you’re ready to move out, there is no stress on the buyer to find a replacement tenant.
Plus, renting often allows people to live in a nicer area than they could afford otherwise. What’s more, you are free of the burden that comes along with caring for maintenance, damage, and other fees that homeowners are responsible for. This can save you money for sure!
So, when choosing whether to rent or buy, consider your situation. Most importantly, how long you’re looking to stay in your home and your financial goals. There are plenty of great online calculators that allow you to plug in specific numbers, along with the number of years you’re looking to stay, so you can get a clear look at the difference between your options.