Buying a house should not be done in a whim, but that does not mean your only option is to rent a place forever. How would you know that it is time to buy your own real estate property? What are the pros and cons in buying or in renting a house?
The New York Times says that when you rent it provides you "substantial stability." As explained, the monthly rent could not simply increase any time the landlord wants since there is a rate that is set by NYC Rent Guidelines Board, also the property owner could not evict you from the apartment "if you follow the terms of the lease."
However, one point that you could not disagree with is that "a rental is not an investment." If truth be told, you are actually "you pay off someone else's mortgage." And that stability that you get from renting will only last as you pay the rent. Once you fail to give your monthly rental, there's a threat that you would lose that stability too.
So buying a house builds equity, but then "it is not also cheap." This is because the mortgage and maintenance cost may possibly be more than what you spend when you rent.
Sell My House To The Smith website has reported a comprehensive comparative of pros and cons of Renting vs. Buying a house. First presented is the pros and cons of renting a house.
The site says that the pros of renting are as follows: flexibility, close to zero maintenance work, no depreciating value, and requires less upfront cash. The cons on the other hand are: possible increase in monthly payments, no equity, no tax benefits, and no creativity.
When you decide to buy a house, here are the following pros: home ownership, build equity, tax breaks, and stable housing payments. As for the cons, maintenance and other expenses is one obvious disadvantage. The rest of the disadvantages are illiquid asset, potential depreciating value, and lastly it requires cash to buy a real estate property.
The website gives common questions that would indicate if you are ready to buy a house or not. First question is "What are your future plans?" Having a goal will keep you focus, and help you make the right decision. For example, if you see yourself moving to a new place, then buying a house is not practical as of the moment.
Next thing to check is your financial capacity to purchase a real estate property. You need to consider the following: credit score, income, debt to income ratio, and asset.
Those things are the basic check list that you need to consider carefully before you decide to buy a house. Take note that purchasing a property is a big responsibility, so it obviously needs careful planning.
Do you have some piece of advice concerning buying a house? Share your insights in the comment box below.
