The advice on whether to rent or buy isn’t so cut and dried. Here are seven questions to ask when considering renting or buying:
1. How much can you afford in monthly housing costs?
2. Are you prepared for a long-term investment?
3. How long do you plan to stay in the home? (One rule of thumb: If it’s less than five years, you might want to rent.)
4. Do you want stability or flexibility?
5. Can you afford home repairs/maintenance costs?
6. What are your financial, career and family goals (e.g., do you plan to relocate for work? Go back to school? Expand your family?)
7. Is homeownership in the neighborhood you want to live in affordable or will you need to relocate?
If you’re moving to an unfamiliar city, have an unstable job situation or don’t know what neighborhood will feel like home, renting for a period of time can be a great option.
“During that rental period, people really get a sense for what they like or don’t like, and we can also start exploring different purchasing options during that time,” Schanck says.
While no one has a crystal ball, it’s important to evaluate your current life situation and how much it’s likely to change in the immediate future, as well.
“I recommend clients who are going through life changes, like divorce or downsizing, to rent as a way to decompress before making a large purchase that may not be right for their new lifestyle,” Hopson says.
Schanck agrees, encouraging her clients to think ahead: “For clients who have a changing personal situation, such as getting married or planning to have a child soon, I encourage them to look at properties they’re not going to outgrow quickly.” (that is buying one)
Another consideration: Can you afford a home that will fit your lifestyle in the next few years, or will a tight budget limit your options? For many people, renting or buying comes down to what they can afford at the moment.
The bottom line
Ultimately, deciding between renting vs. buying a home is a personal choice. If you haven’t determined which is best, it may be helpful to speak with a real estate agent that can help you weigh your options and make an informed decision.