Renting versus buying has always been a dilemma for home seekers. And the answer to this question is, obviously, always a matter of personal taste and possibilities.
So, you have decided to move from your current home but have no idea whether it is a better choice to buy your own property or to rent one. Buying a house is a huge step in your life which can bring you a lot of personal satisfaction. However, on the other hand, it is also a long-term investment and commitment which can eliminate flexibility from your life.
Still struggling to make a choice? Here are a few things you should consider that can help you make a well-informed decision:
What does your bank account say?
First things first, before allowing this dilemma to pop into your mind, you need to make sure you double-check your bank account. The most influential factor in your decision will, unfortunately, be your budget. Sometimes, buying over renting isn’t an option but only a question of basic math. If you can’t afford to purchase a property, your dilemma is pretty much over. At least the dilemma of choosing between two options.
However, you may still have the option to get a loan to purchase your home. But sometimes, even that can be a little bit more challenging if you have a bad credit score.
So, the first thing you should do is to figure out your finances and be smart about how you choose to invest your money. For example, there is one more financial dilemma that you should consider: The monthly mortgage payments may be higher than your monthly rent. However, in the long-term, the money you pay for your rent can be considered a lost investment because, by the time you decide to move out from your rented property, you won’t get back any of the money you have paid in the meantime.
So, if you think in the long-run, purchasing a property is a lot more financially advantageous than renting.
Take a look at the real estate market trends
The real estate market has experienced significant growth in the last decade. Mainly due to the rapid urbanization and the world’s growing population which have led to growing demand in housing options. So, there is no way real estate investors could complain about how business works for them. The growing demand for housing options has created the ideal environment for real estate investors to decide how the market is for the house seekers.
However, for you, as a buyer, these two trends which have helped the housing market grow might not be very favorable. When business is going well for real estate investors, property prices tend to remain high or to continue to grow. Like any other industry, the real estate industry regulates its prices depending on the demand from the customers for housing options.
Plus, there are also a number of factors that can determine the real estate prices including economic factors such as unemployment or income growth, comparable properties, and the appraisal value.
So, considering all the factors that can affect the real estate prices, you might want to do some thinking ahead before making your decision. What are the predictions for the real estate market or for the stability of the overall economy of your area? Are the prices expected to continue to grow or are they expected to lower? Such factors can make real estate prices grow or drop overnight or over the course of one or more years.
If you identify a trend that shows that the prices will continue to grow, you may want to make this investment right now. However, if there is strong evidence that real estate prices will drop in the future, you should get armed with patience and wait for a better time to invest in a property.
Consider your long-term plans
We all have future plans that, some more than others, can have a huge influence on our current lifestyles. From starting a family to relocating for a new job, such major changes in your life can interfere with your decision-making process on whether you should buy or rent a property. For example, if you are planning to change your job in the future and you would be willing to accept an offer that will imply your relocation, purchasing a property right now may complicate things for you.
However, if in your predictions for your future there is no major change that should influence your decision or if the major change may be putting down roots and starting a family, purchasing a home may be the best option for you in terms of smart money management. Yet, you shouldn’t buy just any home. When purchasing a property for the long-term, you should invest in a luxury home that is considered a good option by the real estate market for both investment as well as dwelling purposes.
In fact, if you are planning to start a family, purchasing a home rather than renting one can offer you two more advantages that renters don’t get. First of all, as a homeowner, you get the chance to experience a sense of belonging as you become part of a community. As a homeowner, you are more likely to invest in becoming part of the community you live in. Whereas, as a renter, it is very unlikely that you make this effort because you know you will be moving after a while. Secondly, home security is simply paramount for families which is, again, something that renters can’t benefit because it all depends on the rental agreement period and the decision of the landlord.
Buying or renting a property is a tough and intimidating decision. It implies a huge financial decision and its effects can matter for a long time from this moment. So, it is wise that you rigorously consider every factor that can influence the choice you make and how will the choice influence you in the long-term.
