Renting vs. Buying a Home – Is Buying Always Better?

That burning desire to own a beautiful home that is completely yours and which you can do whatever you want with is completely natural. We all want our own space in this world, somewhere we can be ourselves and feel completely at home. When you consider the equation of renting versus buying a home from that personal angle, buying almost always comes out on top.

Yet, what happens when you look at the renting versus buying a home equation from a financial and lifestyle perspective, renting can come out at the top for some people.

Renting vs. Buying – Financial Considerations

First, you should look all of your options to see what it will cost in the area you want to live in. Go look at some houses and look into their sale prices, then find comparable houses in the same area and determine what the monthly rent will be.

Now, take those figures and compare the yearly cost of renting versus buying a home. Of course, your final monthly payments on a house cannot be determined exactly since it depends on the interest rate that you get, closing costs, and what your insurance will run. You can however use the asking price as a rough estimate and compare it to the cost of renting similar homes in the area.

You also have to consider additional costs of owning a home. There may be some repairs required when you first move in and you will likely want to paint the walls and do some decorating to make it feel like your home.

When you rent, you don’t have to worry about repairs and upkeep since that will be handled by the landlord. You can however reduce your chances of expensive repairs when buying a home if you pay a lot of attention during the inspection process.

If the price of housing in a particular area is too high, it can make more financial sense to rent until prices come down some. If you can get a great deal right now, then chances are it will come out less expensive than renting. You also have to consider whether the cost of upkeep for a home is more than you can afford, even if you can get low monthly payments.  How much of your yearly income will the mortgage or rent run you? Conventional wisdom is that you should spend no more than 30% of your monthly income on your housing costs.

Renting vs. Buying – Lifestyle Considerations

Buying your own home has advantages such as renovating to make it reflect your personal lifestyle, while you are stuck with what you are handed in a rental home. Yet, there is a corresponding downside with owning a home in that you are on the line to fix things when they fall apart. This means making some repairs yourself and paying professionals to come in and make others.

When you rent all of these responsibilities fall to the owner, so you simply let them know about it and go on living your ordinary life. It is also much easier to move on short notice if you do not have complete ownership and responsibility for a home.

From a lifestyle perspective, renting will make more sense if you live a carefree lifestyle or like to move frequently.

To determine what is best for you, first figure out whether you can afford to buy. You can then seriously consider the ongoing expenses and your lifestyle to determine if this is the right time to buy or not.