No matter what stage of life you’ve come to, much of your future decisions hinge upon whether or not you’re renting your home or if you’ve decided to purchase it. So, what are the pros and cons to consider when making the decision to rent or buy a home? Here’s a short guide to help you decide which is best for you.
Consider Your Income
While buying a home is usually a better long-term investment, sometimes it isn’t a viable option in everyone’s standing financial situation. It also doesn’t just come down to whether a rent payment is cheaper than a mortgage payment, either. There are many costs to consider when buying a home, like property taxes, closing costs, home maintenance, insurance, homeowner fees and utilities. Sometimes, for the short term, renting is just more affordable.
If you’re in a position where you have enough money to buy a home and solid enough credit (more on that, later) to take out the loans you may need, consider buying more seriously. By increasing the equity of the home you buy, you may be able to sell it for more, later, or even rent it out to tenants when you’re ready to move onto a new home.
Check Your Credit
Most people will have to take out loans in order to buy their first home. In order to do that, some have to ask a hard question: will my credit allow it? If your credit is in a good place, buying a home can be easily within reach. However, life happens, and credit scores can dip. A great way to improve your credit is to rent your home, as the regular, on-time payments can contribute to your score.
Are You Where You Want To Rent Or Buy?
Finally, buying a house requires a lot of commitment. Due to the higher monetary investment you’ll be making, you’re likely to have to spend a longer period of time in the home in order to pay off a mortgage. If you anticipate that you’ll need to move in the next few years, buying a home and entering into a 30 year mortgage might not be for you. However, renting allows for much shorter leases, and can even allow you to live in a place you might not otherwise be able to afford for a short period of time. Renting can easily be a gateway to indicate whether living in a certain location is perfect for you to buy into.
Buying a home doesn’t have to be the hardest decision of your life, but it certainly should be one that takes some deliberation. Whatever your decision, OMG Brokers’ team is here to help you find the perfect home to rent or buy. You can even do some of the research yourself with our Property Search Tool!