Everybody wants to live in their dream house. Few people make it, and others don’t. But they keep dreaming; one day, they will have their dream house.
Buying a house is tough if you can’t save enough money after paying monthly expenses. Home buying is not a good idea for everyone, even if you have enough money. Sometimes renting is a better option than buying.
If you can buy a house, but you are confused, then you are at the right place. In this article, I will show you which option is best for you. I am going to talk about buying and renting preconditions and their advantages and disadvantages. These will help to make the right decision on buying and renting.
Let’s begin.
Table of Contents
Should I buy a home?
Personal home is everybody’s dream. Living in own home is different from living in renting home. Living in own home gives satisfaction and pride. In addition, it gives a great level of security. But home buying decision is not always correct.
Here the million-dollar question comes, should I buy a home or not?
Before answering this question, you need to answer a few questions. Let’s find out these questions’ answers below.
Buying preconditions
Are you free from debt?
Do you have any debt? I am not talking about student loans or consumer debt. You have to be free from any debt. It is the first condition you must ensure before making the home buying decision.
Do you have an emergency fund?
If you spend all your savings on buying a house, what would happen if you lost your job after buying a home? That’s why you must ensure having enough money for at least three to six months.
Ensure your home payment is not more than 25% of your monthly income.
Buying a home is important, but it doesn’t mean you should stop saving money for your kid’s education and retirement. So, ensure your monthly home payment is 25% or less than your monthly earning. Use a mortgage affordability calculator to get an idea of what you can afford.
Will you live in the same place for more than five years?
Home is not for moving people. If you don’t live in the same place for a long time (at least five years), you shouldn’t buy a home.
Are your answer is yes to the above questions? If yes, you can go forward with buying your dream house.
Wait!
You can’t make your final decision depending on the above questions; there are more things to consider.
Let’s know about them.
Buying advantage and disadvantage
If you have money for buying a house and ready to make the deal, then check out home-buying advantages and disadvantages before signing the paper.
Buying advantage
- When you are paying the mortgage, you are getting closer to full ownership. On the other hand, when you are paying rent, money is gone.
- Home is an asset. If you buy a home today at $30000, in the future, you can sell it for $350000. It is a great investment.
- Having a house gives you tax advantages. For example, when you are paying the mortgage, you can deduct mortgage interest while filing a tax file.
- While living in a rented house, you may want to renovate the house, but your landlord won’t allow it. As a homeowner, you can renovate your home. You can make changes inside. Do whatever you want; no one is going to stop you.
- Having a house gives a level of security. You don’t need to think anymore about where your family will live if anything wrong happens to you.
- Owning a house gives you a permanent address; it makes you feel proud.
Buying disadvantage
- If you want to relocate somewhere for one or two years, it is a problem. You can’t just close the door and live.
- Your expenses will increase. As a homeowner, you have to pay for renter’s insurance, flood policy, and high utility bills.
- Maintenance responsibility will be solely on you.
Should I rent a home?
In the beginning, let’s clear one thing, renting is not a waste of money. You are paying for living in a place. As long as you’re living, it is not a waste of money. However, I don’t recommend renting. But in some conditions renting is better than buying.
Renting conditions
When you have debt
If you have debt and you are paying it off, you should go for renting. Sometimes if you need to spend less than your current spending, you can move to a cheaper apartment or home.
If you need to move frequently
If your job requires moving place to place frequently, then renting is the best choice for you. For example, if you are in a private job where you need to change your office every six months, in this case buying a house is not a better idea.
If you still don’t know where you want to live
You didn’t select your living place yet? If you are confused about your living area, then you shouldn’t buy a house. Because if you change your mind and want to move fast, it will be a disaster, as it is hard to sell a home in a short time.
Renting advantages and disadvantages
Though most people recommend buying but renting has great advantages. Let’s know about renting advantages and disadvantages.
Renting advantages
- The best thing about renting is its flexibility. If you want to move to other countries for one year or tired to live in one city, renting is for you.
- Living in renting a house doesn’t require maintenance costs. Even you don’t need to worry about it. If you face any issue, call your landlord, and they will solve it.
- You don’t need to worry about home damages.
Renting disadvantages
- You are not building any equity.
- You don’t have the authority to customize the renting house extensively.
- Rent could increase at any time.
- The landlord could decide to sell the house or stop renting anytime.
- You won’t get any financial incentives.
Convinced and decided to rent a house, then check this site to rent an apartment.
Final words
Now, it is up to you. I have provided the necessary information for choosing between renting and buying. Compare your condition with each scenario and check which option is best for you. If you can’t make the right decision, then get help from a consultant.
