Is buying or renting right for you? Many factors go into the choice to rent vs. buy, so it's important to really weigh the pros and cons of each before you fall in love with a home. Let's start with a quiz to determine whether renting vs. buying a home is better for you:
- Do you have debt? If you do, consider renting. If you don't, homeownership may be in your future.
- Are you staying in the area for 3 or more years? If not, renting is a better option. If so, buying could be a good choice.
- Are you financially stable? If you have doubts, then play it safe and wait until you are sure. If you have money saved and income to spare, you might be ready for a house.
Most people rent an apartment or house at some point in life. Whether you've just graduated from college or relocating to a new city, the flexibility of this short-term commitment can be a huge asset. And while some people scoff at the idea of paying a landlord, you'll get plenty in return. There's no need to worry about DIY work if the toilet breaks or the roof leaks. Simply call maintenance to have an expert at your door. However, don't forget about renter's insurance just in case of an emergency!
What are the disadvantages of renting? You might deal with rising rent costs from year to year due to inflation and property value changes. That means higher costs for you without any benefits. Additionally, there are no tax breaks for renters. That can be a huge factor in more established workers, though not as big of an issue for those who are just starting a career. Some people dislike the lack of control in a rented space. You can't make changes to the property, you might have loud neighbors, you might have an undesirable parking situation. There are a lot of things that are beyond your control.