Should I buy a house or rent a place? If you’re struggling with that question, you aren’t alone. It’s one that many adults find themselves asking periodically. How do you determine the answer?
Should I Buy a House or Rent?
While buying a house is often touted as part of the American dream, there are times when renting makes more sense. If you’re trying to decide between buying and renting, it’s wise to explore the pros and cons of each. Then, ask yourself a few telling questions.
The Pros and Cons of Buying
As Investopedia notes, buying a property and becoming a homeowner offers a variety of benefits, including a sense of stability and community, the pride of ownership, and the chance to shape your home to suit your own tastes. You’ll also be able to build equity, enjoy special tax benefits, and even earn rental income if you choose to do so. However, there are some downsides to being a property owner. Buying typically has higher upfront costs, and you take on greater responsibility because you have to handle any needed maintenance or repairs. In addition, relocating can be tough. Selling a property involves certain costs and requires time, and becoming a landlord brings both income and challenges.
The Pros and Cons of Renting
Renting may not be as glamorous as owning, but it does have its perks. As Money Crashers reports, renters typically face fewer upfront costs, and the credit requirements for renting tend to be less strict. Plus, renters don’t have to worry when something breaks; fixing it is the landlord’s problem. They also don’t need to concern themselves with fluctuations in property values, and relocating is as easy as ending your lease. However, renting isn’t without drawbacks. Renters miss out on the chance to build equity, and they don’t get as many tax benefits. They also have little control over their housing costs because the property’s owner sets the rent. Renters also have less stability: While they’re protected from unlawful evictions, there’s no guarantee that their leases will be renewed.
Questions to Help You Decide Which Course Is Best
Should I buy a house or rent? As Money Under 30 notes, it often helps to ask some pertinent questions first:
- Do I want to be a homeowner? When you truly want to own a home, it’s easier to deal with putting in the necessary time, energy, and resources. If the thought of being a homeowner doesn’t appeal to you, you’re more likely to resent homeownership’s demands.
- How likely am I to relocate soon? If you’ve found the place you intend to call home for the foreseeable future, buying often makes sense. After all, the costs involved in buying a home are often balanced out over time by increasing equity and climbing property values. If moving for work or pleasure is likely in your future, renting may be the smarter option.
- Can I afford to be a homeowner? Do you have the financial wherewithal to become a homeowner? Will your credit history, income, and assets allow you to afford a home that you’ll enjoy living in? Are you ready for down payments, closing costs, mortgage payments, property taxes, and other common expenses? Take a hard look at your financial situation if you want to buy property. If the numbers look good, then you’ll be able to proceed with confidence. If not, you can take steps to improve your financial situation so that you’ll be in a better position to buy in the future.
- Does buying make financial sense? In many markets, buying a home involves greater upfront costs, but it eventually allows you to enjoy housing costs that are less than what you’d pay for a comparable rental. However, that’s not true in every market. The only way to find out is to look carefully at the numbers. In addition, you’ll want to consider your other financial goals and the impact that buying a home would have on them.
What do your housing goals look like? The lenders at PrimeLending of Springfield, Missouri, can help you decide if now is a good time to buy a house, and we offer a wide array of loan products so that you can reach your housing goals. Contact us today to get started.