At one point during your life, you will ask yourself this question. It might be while you’re writing a cheque for your landlord, or when your spending lunch window shopping for apartments… again. Homeownership always looks attractive and like a rite-of-passage into adulthood, especially after you’ve been renting for a while, but is it always the best idea?
Well, you could ask 3 different realty experts on what’s best and get 15 different answers. And that’s not only due to the fact that the market keeps fluctuating, but also because there isn’t one universal “correct answer” to this question. To some people, buying a house might be the best decision ever, while to others it’s just something they could do without.
Really, it all comes down to your lifestyle. Those with more of a free-spirit lifestyle, might like the flexibility that comes with renting, as they don’t have to commit of a specific neighborhood, city or even country. Likewise, renting gives you the benefit of having someone on call when something breaks down. On the other hand, owning a home gives you the satisfaction of having something to call your own, and a lot of stability. Really, it all depends on what you want.
Think About Costs
So, buying a house comes with upfront cost that add up really fast. It’s definitely not the same as coming up with a deposit for an apartment. Of course, you could ask for a loan but that’s a whole other animal and you need to be very careful with the payments. Plus, there really are a lot of fees involved with buying a house, so you need to make sure you ask for the total costs before even considering.
Renting on the other hand, doesn’t require that much money on front so in the long run it might even benefit your savings account. However, it is money that you are never going to see again, and there’s always the possibility that your landlord will increase the rent or want you out of the place for different reasons so there’s not as much stability.
Do You Have a Life Plan?
Speaking of stability, your life plan will play a major role when making your decision. Let’s say you want to have your first child within the next year. Then, you should buy as soon as you can, right? Not exactly. See, first you need to do your research. When’s the next best school district? Can you afford to buy a place there? And even if you can, how are the projections for other neighborhoods? Will they be better? What will your financial statement look like the next few months after making such a big purchase? These are all things that you need to clearly answer before packing your things and paying for a house.
Of course, staying in a rented place also has a its pros and cons. You need to know whether your landlord allows children in the property, what your neighborhood is like for babies and small children, and basically all the same stuff you’ll have to ask yourself if you were buying plus all the restrictions (if any) your landlord will put onto you if you start a family.
On the hand, if you’re planning to make a big move across states or to a different country, buying a house wouldn’t make much sense since you wouldn’t have the time to get everything in order and take care of any repairs or inspections that need to be made to the potential property.
What’s the Market Like?
One last point you want to take into account is the market itself. There are some cities when renting just doesn’t make any sense since landlords keep increasing their prices seemingly at random, and at some point it just becomes more cost-effective to buy. Conversely, sometimes the market is just not right to make a big purchase, and if that’s the case, just get yourself ready and wait it out.