Tradition says buying a home is always best, but tradition can be wrong, and these days, renting may sometimes be the right choice for you. Considering the questions below can help you decide.
Do You Want to Buy?
While this may seem obvious, many people may find themselves caught up in a rush to buy a house because they think they are supposed to. The pressure can be even stronger if you live in an area where real estate is hot. You may feel like you need to get a foot on the property ladder before the lower rungs are taken away entirely. This is all the more reason you need to stop, take a breath and check your gut. What do you really want to do?
What Are Your Finances Like?
In some markets, a mortgage payment may be substantially less than a rent payment, especially if you put down a big down payment. Some people may urge you to buy instead of wasting your money on rent, but the fact is that there are financial pros and cons to owning a home. Buying may not be a good idea if it's going to leave you broke.
There's more to homeowning than mortgage payments. There are taxes and repairs. You can't just call the landlord if the roof caves in. On the other hand, a house can be your biggest and most important investment, and you can borrow against it. You can review a guide on taking out a home equity line of credit that explains the best HELOC lenders and how you can access the value that you've put into your home. You'll also get tax breaks as a homeowner that won't be available to you as a renter.
Do You Need Flexibility?
One of the drawbacks of homeowning is that it isn't exactly flexible. If you want to pick up and go somewhere else, you have to sell your house first or at least figure out how to become a landlord. On the other hand, owning a home could help you achieve your own version of The American Dream and represent a small stream of income if you suddenly want to spend a year backpacking around Asia and you can rent out your house for more than the mortgage payment. Conventional wisdom says that if you are going to be in an area for fewer than five years, renting is the way to go. But if you have the money and the housing market is healthy, you may want to buy now and sell in just three or four years if it means you are likely to make a profit.
Do You Love DIY?
You don't have to love DIY to be a homeowner, but it helps. Owning your own place means that something is almost always breaking, and somehow it always seems to happen at the most inconvenient time possible. If you are handy with tools, websites and online tutorials or you're willing to become handy, your life will be a lot easier than if you have to call a service person every time something goes wrong.