Cantey & Company

There are many factors to consider when deciding whether to rent or buy. Both options have their own set of pros and cons that need to be considered before deciding. For example, renting is great for people who like to move around or are just starting their career. On the other hand, buying a home can be a great long-term investment if you plan on living in the same place for several years.

While there is no one answer on whether you should buy or rent, there are set factors you should consider before making that decision. Let’s uncover the pros and cons of buying or renting a home and how other factors might impact your choice. 

Factors to consider for renting vs. buying a home

Choosing to rent or buy a home is a big financial decision that shouldn’t be taken lightly. Both have their own set of pros and cons that you need to consider before moving forward. However, there are some trustworthy indicators to consider when deciding which option is right for you.

Things to consider for renting versus buying a home include:

·        Check your finances first. Make sure you are in a stable financial situation before deciding to buy a home or doing a lot of research. When reviewing your finances, you will want to ensure you have enough reserves to fund up-front costs of a home purchase. These costs include your mortgage down payment and closing costs, to name a few. 

·        Job security is important for securing a home loan and paying your mortgage. It ensures you have a stable income to cover your monthly payments. The lender will review your last two years of employment and determine the probability of the income continuing. If you are a recent graduate, the lender will most likely request transcripts to show you are new to the workforce. 

·        Consider your five-year plan. Those who like to move around or travel a lot might find renting a better option, while those wanting to create roots in a single location will find buying a better choice. 

·        Think about investing in a property. Buying a home can help you gain value and build equity by making home improvements. People who hold onto their homes for a long time usually make money when they sell, as long as the market keeps improving. Building equity in a property is one of the most popular ways to grow a little bit of wealth.

·        Consider the time and money needed to maintain a home. If you rent and something breaks, you can contact your landlord to fix it. But when you buy a home, you have to keep up with the maintenance of the entire property. If something breaks, you will need to pay to get it fixed and spend time fixing it. It is important to have extra money for potential repairs when buying a home. 

·        How much flexibility you need: When you own a home, you can do whatever you want, from adding a room to changing the paint! However, you have minimal freedom or flexibility to change aspects of your living space when you rent. However, renting gives you the freedom to move around and not be stuck in one place, even within your city or town.

Make sure you’ve carefully weighed all the external factors of renting vs. buying a home before deciding. Big investments, like buying a home, need to be the right fit for your needs. 

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