Rent or Buy: 6 Questions to ask yourself before deciding
Rent or Buy: 6 Questions to ask yourself before deciding
If you’re like many people who are at a real estate crossroads, you may be finding that you’re in a position to have to choose your next move. Should you continue renting? Or should you take the leap and purchase a home?
Of course, your decision will depend on a lot of different things – your financial situation, your credit, your timeline, goals. And in the end, the right answer will be different for everyone. But there are a few questions that you can ask yourself to get a solid pulse on where you stand currently, and ultimately, to help you narrow in on the best path for you.
Is my current situation stable?
When it comes to making the decision to purchase or rent, you’ll want to be completely honest with yourself in terms of stability. Of course, renting is a contractual commitment. But purchasing takes on an entirely different level of liability. Are you in a place in your life where you have a steady income, are going to stay in one place for the foreseeable future, and where you know you’ll have income (or a means to pay) for the duration of your mortgage? All of these questions are key to deciphering if it will be worth it for you to move your money from a rental to a home purchase.
Is my debt in a place that’s manageable?
Many, many people have some kind of debt. But if you’re swimming in payments for credit cards, loans, auto payments, and other sources, it may be worth taking a look at whether a mortgage payment is feasible. After all, rent payments can easily change depending on where you move, the size of the place you’re renting, etc. But with a mortgage, you’ll more than likely be locked into a steady payment for years and years to come. Unless you’re planning on paying for your new home in cash, think really hard about whether you can (or can’t) afford to have that additional payment on your debt roster.
Do I want more freedom with my house design and decor?
For many people, renting can be a drag on the home decorating front. After all, white walls, unchangeable fixtures, and features that can’t be upgraded without explicit permission can make a rental feel blasė and far from custom. Especially if you’re in a position where some extra design freedom is a must have, purchasing a home could be a great investment. For many, not having to worry about answering to a landlord or rental company when it comes to changing their home features can be the ultimate plus.
Am I ready for a long-term commitment?
When it comes to renting a home or apartment, lease terms are typically for one year. Meaning, after a year’s time, if you hate your space or are ready to move on, you can do so– no muss, no fuss. However, when it comes to buying a home, your commitment level gets increased tenfold. Not only are you locked in for years and years to come, you’ll be making a legal agreement to pay for your property every single month, no matter what. Want to move? The mortgage still needs to get paid. Want to sell at some point? It’s completely your responsibility to make that happen. Need repairs? It’s all on you.
As long as you’re in a place where you understand the full undertaking of home ownership, purchasing a home can be an exciting and fulfilling life event. But rest assured, the commitment level is very real.
Do I make enough money to purchase and maintain a house?
Ah, yes. Not only will you be paying a down payment and your mortgage, you’ll also want to budget for any repairs or maintenance fees that will come along with purchasing a property. When it comes to a rental, if your fridge takes a nosedive or your air conditioner stops working, the process is simple. Call your landlord, tell them the problem, and schedule a time to get the problem fixed on their dime. But when you own a home, all of those maintenance (or upgrade) fees become your sole responsibility. Make sure you’re in a position where the extra money that will inevitably be needed to keep your home in great condition is there.
What are my long-term goals?
Purchasing a home isn’t for everyone. In fact, there are thousands of people that love the idea of not being tied down with the mortgage and long term commitment that comes with owning a house. If your goal is to move around often, to not have to worry about maintenance, and to avoid any eventual sales or renter hunting processes, buying a house might not be the best move for you. But if you have the time and money to invest in a property that could potentially lead to substantial equity, and even a certain level of stability, then purchasing could be the best fit.
We know – making a huge decision about taking on a huge cost, like home ownership, can be a bit daunting. That’s why it’s so important to have someone on your side that can help you to weigh the pros and cons, and make your decision (whatever way you go) much, much easier. Ultimately, this means finding a real estate agent or company that you truly trust, and that can help connect you with the resources and knowledge you need.
Buying a home (or continuing to rent) can be one of the biggest decisions you’ll make. But ultimately, the most important thing is going in a direction that is the absolute best for you.
