The decision of whether to buy or just rent a home will all depend on what your lifestyle is. Both have advantages and disadvantages, and the best option for you will be weighed across multiple factors. This includes your long-term plans, lifestyle, finances, and area of work.
Here are some tips when deciding whether renting or buying a home is the best option for you.
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Finances
The first thing you have to consider is how much it will cost. Depending on affordability, this will be the major deal-breaker in deciding whether you should rent or buy a home.
In renting a home:
- It would allow you to have a generally fixed monthly cost
- Usually, your monthly rent will not include your utilities like cable, internet, gas, and electricity bills, as these are included in your monthly rent already.
- You will need to provide a 3-month advance deposit as a security in case anything happens.
- When you are a tenant, the landlord is usually responsible for repairs and other property issues. So, this poses as a great convenience for you.
On the other hand, when you buy a home:
- Opt to arrange a home loan with a bank.
- Will give you the flexibility of fixed monthly payments similar to renting. However, the downside is that banks usually require a down payment from 10 to 20 percent of the house’s price. This is usually way bigger compared to the 3-month deposit for renting a home.
- On top of the monthly amortization of your home, you will also be required to pay a percentage interest for the home loan.
If you have the cash, it might be better to purchase a home since monthly payments will be similar to renting. At the end, the home will be yours. Gumtree Real Estate has some great-looking, affordable houses or properties to choose from. However, if you cannot afford the down payment, it might be best for you to continue renting.
Lifestyle and trends
Even though owning a home can provide some sense of security, it will also depend on your lifestyle. Opt for rentals:
- If you are the type of person who isn’t sure if you will be home that often because of work.
- If you are just going to live in the area for a few months or years. An example of this situation is if you are just living in the area for college or further studies.
- If your job requires you to keep moving from place to place. Since you are more mobile, you can move out at the end of your contract.
- If you move around a lot since it requires fewer upfront costs compared to buying a house, which requires a large amount of down payment.
Another factor you have to consider is also the trends of the city or market. For instance, in a state like Chicago, the lifestyle of the people entails them to rent out houses instead of buying. That is why most of the properties available are for rent rather than for sale.
On the other hand, in some cities in Sydney, Renter vacancy is shifting and is affecting rental prices. There are some cities that have a low and some with a high vacancy rate. Because of this, places that have a low vacancy rate tends to have higher rent prices. So, that is also one thing to consider.
Long-term advantages
Time is another crucial factor you have to consider when deciding whether to rent or own a home. Will you be staying in this house for just a short period of time? Are you considering a house for your family and kids to grow up in?
If you are in it for the long run, buying a house would definitely be the best option for you.
- It never depreciates and only appreciates in value. It will go up 2 or 3 times.
- It will not only serve your needs, but also serve as an investment in a financial standpoint.
- Offers security and stability. When renting, since you do not own the home, your landlord may come anytime to get the house from you.
- Will allow you to make your own renovations and make it feel more like a home.
Both options offer compelling arguments and have valid points. Consider these three things, it can help you make your decision for the best option. Once you have pondered on these aspects and evaluated yourself, you will be on your way to making the best decision of your life.
