The decision to rent or buy a house is much more than an emotional decision. Many financial aspects play into whether it is better for you to buy or rent a house.
Here are some things to consider in that decision-making process.
Should I Buy a House? Location and Future Plans
Consider the location of any possible homes. If you have or plan to have children, consider the school districts for any possible homes. Maybe the school district you desire only has rental homes available.
Will the home you choose be near the stores and priorities important for your family? What type of commute will you have for your job? These location factors and your preferences may determine if renting a home or buying a home is best for your family.
Also take into consideration your future plans. Are you planning on staying in the area long-term? Are you on a temporary job contract and will be moving in a few years?
If you plan to stay long-term, buying is the better option. When you rent, the landlord gets to make the long-term decision about the property and at what point to sell it.
Should I Buy a House? Comparing the Costs
What would it cost in renting versus buying? Take the time to do a cost comparison.
This should take into account a month-to-month comparison of cost as well as look into specific costs for each choice. If you buy a house, you will have to consider the cost of maintenance instead of calling the landlord or maintenance department. In either case you will have insurance costs, whether it is homeowner’s insurance or renter’s insurance; although the prices will vary for coverage.
If you chose to rent, you will also have a security deposit, and the landlord can raise your rent.
You will want to research the difference in utility costs for either choice. If you decide to buy a house, you can deduct mortgage interest on your taxes.
Additionally, when you own your home, you get to choose the colors on the wall, the backyard design and the appliances. When you rent, those are determined by the landlord or may require extra permission.
Should I Buy a House? Finding Someone to Help Decide
Sometimes the options are too overwhelming to make a clear decision of whether it is better to buy or rent a house. At that point, consider finding someone to help you determine the best decision.
That help can come in the form of using online calculators to show the differences in price between buying or renting, discussing options with a licensed Realtor or reviewing financial implications with a financial planner, investment team or accountant.
