How to Decide Whether to Rent or Buy

Choosing whether to buy or rent a home is one of the most difficult decisions a homeowner or renter can make. Truth be told, there is simply no right or wrong answer. Multiple factors, both financial and emotional, go into the decision-making process. Considering all the angles will help determine what is best for you. Below are a few factors to consider when making the decision of whether to buy or rent a home.

How long are you planning to stay?

If you aren’t planning on staying in a particular city for long, renting may be the best option for you. Millennials, in particular, have shifted away from the idea that part of “The American Dream” is to buy a home right away. In a survey done by Rent.com, 80-percent of people ages 18 to 35 are choosing to rent rather than to buy, at least until their mid 30’s. Renting provides a flexibility that appeals to those needing to relocate for work, school or personal reasons without having to commit to a long-term mortgage. The New York Timesrenting versus buying calculator serves as an excellent tool to compare the net costs of buying a home versus renting over several years.

Future Investments

If you’re planning on settling down in an area for several years, owning a home can be an excellent long-term investment. When you buy, you aren’t just forking over money to your landlord each month––you are investing your money into something that you own, that appreciates (increases in value) an average of 3 to 6 percent annually. Of course, there are many fees involved with homeownership, like monthly mortgage payments, homeowner’s insurance, renovation, and repairs. However, these costs can be offset by the benefits of long-term appreciation and property tax deductions. You’ll have to weigh the pros and cons based on your individual situation.

Know your neighborhood!

If you are a homeowner, businesses and development in your neighborhood can affect the appreciation of your investment. For example, when a WholeFoods moves into your neighborhood, the appreciation goes up 34-percent on average! Over time, this is a wonderful return for homeowners.

For renters, if the property value increases, the rent can increase as well. You’ll have to re-evaluate if you can sustain the rent increase based on the property and neighborhood it’s in. If you are beginning to see a price increase because of new development, it may be time to move or take a strike at the housing market if it’s financially within your means. If you’re looking for a new home in charlotte nc, take a look at essexhomes.com.

Renovations & Repairs

It’s inevitable; over time all homes will require some maintenance. These repairs can cost a pretty penny if you buy a home. According to Home Advisor, the national average for home repairs and renovations is $9,956 annually. However, this cost can be largely offset if you choose the DIY route and make repairs yourself. Plus, improvements on your property can qualify for a tax deduction. Fortunately for renters, repairs are often done at the expense of the landlord. If you’re a Landlord, search property managers maryland for example to find how an agency can help you organise your maintenance work. However, if you’re renting and find an issue with the property that falls beyond the realm of ‘reasonable repairs’ then you may well find that the landlord has no obligation to assist you, nor are you allowed to carry out modifications yourself. For example, if you have particularly noisy neighbours and wanted to install some soundproofing with a company like Soundproofpanda.com you might find you are unable to do so. Whereas if you owned the property that wouldn’t be an issue.

The bottom line? You have to consider the financial impact renting versus buying will have on you in both the short and long term. Homeownership is a longer commitment, but can also be very rewarding and financially beneficial. Renting does not offer a financial return on investment, but offers mobility and freedom that can better suit certain occupations and lifestyles. Most importantly, ask yourself what will make you and your family happy in the years to come. Before making any decisions, connect with a professional realtor who will be able to help you reach your home goals.