When we relocate or look for a new home, the question of whether to rent or to purchase the house almost always comes into the picture. Sometimes we will have the urge to purchase a property (even if our means are telling us not to), and there are times when we would have been better off purchasing instead of renting it. Today, we identify certain scenarios that can help you choose the better option.
How is Your Income Stream?
If you have a steady source of income, it’s easier to plan for your expenses. This also means that if you have any big-ticket purchases, such as purchasing a home, you can confidently consider that. Notwithstanding any unforeseeable emergencies (like job loss or health issues), a steady income means you are in a great financial position to purchase a home.
If you aren’t sure of your income, or it fluctuates, you may find it hard to get approved for a home loan. Renting is a wise choice for you as you build your credit history, save up for a down-payment, and shield yourself from the pains of losing your home due to income loss or foreclosure.
Location and Prices
Income is just part of this checklist. That is, there are other factors to consider when purchasing a home or renting one. Location and pricing also play an integral part in coming up with a final decision.
Observe your current location and do a little bit of math. Factor in the benefits and maintenance of buying a house versus renting one. For example, when you buy a house, you spend money on renovations, taxes, and most important of all, a mortgage. Ownership benefits aside, if there’s a huge discrepancy between renting and buying the property, you might be better off choosing the former than the latter.
Long-term or Short-term
This completes the essential factors in considering whether to rent or buy a home. Aside from income, location, and price, how long you intend to stay in a certain place might just be the deciding factor. If you’re in for the short-term, more often than not, you’re better off renting. On the other hand, if you’re there to stay, then owning a property is not just cost-effective, but you’ll also have ownership benefits and can enjoy the effects of property value appreciation.
Can You Customize?
Another factor to consider is whether you can spruce up the place or not. If you don’t mind the factors we mentioned above but are willing to pay a premium so that you can make a place your home, then the obvious answer is to purchase the property. Unfortunately, you can’t enjoy the same freedom when it comes to rental properties, at least for most of them.
Maintenance and Upkeep
Lastly, owning a home involves certain maintenance costs and upkeep. Before pulling the trigger, consider this. As mentioned before, you have to consider taxes, mortgage, renovation costs, and other similar expenses when owning a home. Renting may come out cheaper sometimes, especially if you’re just there for the short term.
Buying or renting a property is a question we’re always confronted with whenever we move around. It can be tough sometimes, but we hope that this guide can help you make a more informed decision. For your lending needs, contact us at Total Lending Concepts today.