When to Buy or Rent

A common question for potential buyers is if they should continue renting or if they should buy a home. When considered purchasing a home, there is more to consider than financial readiness. Other factors make a large impact on this decision. It is important to account for lifestyle, ability to invest, and timelines as well.

With interest rates and rent prices increasing, the decision of buying or renting is becoming more prevalent. A bonus for purchasing a home is that there may be certain tax benefits that renters do not get. Purchasing a home should provide equity over the course of time that renters would not get. However, there may be certain unexpected maintenance costs associated with buying that renters would not have to cover.

Additionally, lifestyle factors can influence the decision of whether to rent or buy. In the days of remote working environments, renting provides the flexibility of being able to travel and change environments when wanted. However, a good rule of thumb is to purchase a home if moving within 1-4 years is in the plan. Considering, also, the stage of life a potential buyer or renter is in makes a large difference. Having small children may influence a buyers decision, or being empty-nesters may lead former homeowners to become renters.

Lastly, considering one’s ability to potentially invest into a home purchase is a major factor of consideration. Establishing roots in one specific area is best for home buyers planning on staying in a specific area for at least five years. After this point, there is a better chance to gain back the initial investment of purchasing a home with some equity to spare. Being sure about the location is very important when purchasing.

If considering renting or buying a property, it is always best to consider these factors and personal circumstances. Asking a lender about purchasing power and consulting a real estate agency may help in the decision making process. For more information on the purchasing process, feel free to call us anytime!