Should I Rent or Buy?

Dated: 12/04/2018

Views: 20

Buy V/s Rent

This one simple yet complicated question made many of us think over buying v/s renting and believe me it’s a kind of puzzle.

It’s like to be or not to be type of question, in this article I am trying to explain what factors need to be considered while debating on this question! 

Here are some factors to consider when you're trying to decide between rent or buy

Affordability- As spring market is ready to bloom where home prices are affordable right now but might rise soon, so as the rent is getting on higher side, you have to think on all the cost involved in buying or renting your house.

How long do you want to stay in the house? House prices depends upon lots of other factors and they keep on changing year after year. If you have steady job and going to stay in one particular neighborhood for more than 5 years, buying is always been beneficial and affordable. There is much lesser risk as home prices keep drifting year after year.

If you own for five or more years or at least a bit over longer periods of time you'll have built up more equity in your home by paying down the mortgage over five years, It sounds to be a good investment comparing to renting where you lose money in rent and at the end of five years that house do not belong to you. Also, keep in mind every year after year the rent is going to go up a bit, it does not go down, so no equity- no gain here.

What is easier? Renting or Buying It is said to be to true while renting you do not have to do any repair work, no maintenance for you, less responsibilities for you. But again, you have to do all these with time landlord’s time frame, you can’t make any changes to the house without landlord’s permission, but if it’s your own house you are free to make any changes you want, you make your house look beautiful with your choice, your taste, no need to have permissions from any one, you are your own boss! And believe me every time you do some work to maintain your house you are adding more value to the house, which is not the case with renting.

Don’t overspend If you live in a good location, in a trendy neighborhood with no rent control, your rent is most likely to go up over the time while a fixed-rate mortgage won't.

Don't overstretch yourself, housing experts Freddie Mac says don't spend more than 28 percent of your gross pretax income on your monthly housing payment. Or, another rule of thumb is that your combined debt (housing expenses, credit cards, student loans, alimony, car loans, etc.) should be between 30 percent and 40 percent of your pretax income. 

Is it cheaper to Buy or Rent? By years to come and by conventional wisdom, it is said to be true renting is cheaper than buying. But number of case studies have shown buying your own is always been affordable than renting.

As market is getting in shape and the mortgage rates are steady it is right time to run all of the numbers and check the cost to buy or rent in the neighborhood where you want to live. Do your homework, talk to your friends and family, get opinions from peers, talk to your financial planner, be confident and be prepared. With perfect planning and financial approach buying a home always have benefits.

 “Rent V/s Buy is always being a topic for discussion, should I rent or should I buy a real simple yet complicated question for homebuyers! ”

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