To Buy a Home or to Not Buy a Home? – That Is the Question
You are probably in a position where you need to decide whether to buy a home or rent one. Well, you have come to the right place!
Finding a place to live and figuring out if you can financially afford to buy or to rent can be a stressful experience for some people. We are breaking down some of the most important information you need to know when it comes to making your decision of buying vs. renting in this article.
The Quick Fix
Chances are that the fastest and quickest way to get yourself into a place to live is to rent either an apartment or a home. With renting a space, you do your research, maybe even tour the property, sign the lease, move in, and make your monthly rental payments!
When it comes to buying a home, it can be a bit more involved and in-depth compared to renting. First you have to shop around, then tour the property (most likely with a real estate agent), find out how much you’re pre-approved for a loan for, go through the offer process, the home inspection, obtaining a loan, purchasing title insurance, then finally closing and getting those keys to your new home!
One of the biggest cons of renting is that you are not able to build or put any equity into what you are paying for. All that money you spend monthly goes straight to the landlord. Compared to owning a home, renting may be seen by some as a ‘waste’ of your hard-earned money.
But renting can be a great option for short-term situations. Because why go through all the effort in buying a home that you don’t love or even like just to ‘buy a home’, right?
Let’s say you do find the right home but are scared of the up-front financial investment though. Understandable. But we are big believers that owning a home is the best long-term investment you can make, especially financially. All that money you spend in a mortgage builds equity. Think about it, when you do decide to sell your home, you will most likely walk away with a profit. You do not see that happen with renting.
Something also to ask yourself when buying a home or renting a place is “How long do I see myself in this location?” By answering that question, that might also help you decide on your long-term housing decision.
When it comes to buying a home versus renting a home/apartment, you will need to evaluate where you are financially, particularly if unexpected costs come up. For instance, you own your home but then the HVAC system is broken and/or is unrepairable. Unlike renting, you are solely responsible for fixing or replacing the heating and cooling system. Which can usually cost a pretty penny upfront.
Meanwhile, renters usually do not have to lift a finger or worry about the HVAC needing repaired or replaced. That is the duty of the landlord to fix. That being said, not every landlord may immediately fix the HVAC leaving you either cold or hot without a resolution.
Are you also prepared to put a down payment on a property you want to buy? Are you prepared to pay for an inspection or for any closing costs? What about title insurance to protect your home/investment? These are the types of financial questions you should ask yourself when considering buying or renting.
Speaking of costs, did you know that sometimes owning your home can cost you less monthly compared to renting? For many people who have bought a home in 2020 or 2021 (or have even refinanced), they have been able to save thousands of dollars yearly compared to renting. Again, this is something you can investigate more and decide on what makes the most financial sense.
In the End
At the end of the day you know what you are prepared to do financially, emotionally and physically when it comes to buying vs. renting a home. Ready to buy? Wonderful! Ready to rent until you find a place to buy or just rent as long as you want/need? Great! The options are quite endless when deciding whether to buy a home or rent.