Now that you’ve decided home ownership is for you, there’s one more important question to consider: Is it better to rent or buy a house? That depends on your situation, finances and goals. Many people are asking themselves if they should buy or rent because they are purchasing their first home or moving into another home and downsizing for retirement.
Buying a home is part of the American dream and there’s a lot of independence, pride and satisfaction that comes with it. While, for this reason, it may be better for some people to buy a house, there are a lot of other factors to consider. Is it better to rent or buy a house? This guide will help you decide.
When is Buying a House Better than Renting?
Buying a house is better than renting if you are financially prepared. It is also a good long-term investment. When you’ve outgrown your home, you can sell it and make a profit, or you can keep it in the family for future generations to lay down roots. When you ask yourself is it better to rent or buy a house, that answer largely comes down to finances and your lifestyle.
Buying is better than renting if:
You are financially prepared. You have an emergency fund, you’re out of debt, you have enough money for a 20% down payment, interest rates if you take out a loan, and you’re prepared to pay 25% or less of your monthly take-home income on the mortgage payment.
You plan on staying in the same area for five years or more.
You want to renovate your home and/or make a lot of internal and external changes.
Renting Vs. Buying a House – What Are the Pros and Cons?
There are many advantages to purchasing your own home. But is it better to rent or buy a house?
Here are some of the pros of buying a home:
For one, each payment brings you one step closer to home ownership. When you pay your monthly rent that money isn’t going toward anything except ensuring that you have a place to live. When you pay your mortgage each month, it’s one more reminder that that home is yours and one day when you’re done paying your mortgage off, you’ll have the pride and satisfaction of knowing that your home is 100% your own.
Each time you make repairs and maintain your home, you are working on increasing its value over time. If you decide to sell it years later, you could get tens of thousands of dollars back.
If you own a home, you can also renovate it to your heart’s content without getting in trouble with your landlord. If you’ve always envisioned yourself being able to fully customize your space like that, there should be no question what’s right for you. Be creative and have the freedom to do what you want. If that’s how you picture your home journey, then you should go for it.
Buying a home is not right for everyone, or it’s not the right decision right now. Here are some reasons why it may be better to rent vs buy:
Whether it’s for work or pleasure, it’s harder to get up and travel. If you like to travel for six months or more, it is a lot easier to get out of your lease than it is to sell your home. It’s especially difficult if you decide to take off on a whim.
It’s not ideal if you plan on relocating often. If your job frequently requires you to move to different cities, especially at random, the responsibilities of homeownership may not be for you.
You’re not in the right financial situation. Buying a home is a big commitment and it’s not the right decision for everyone. Or it may not be the most feasible option for you right now—and that’s ok. When you own your home, you’re not only responsible for maintaining it, which can sometimes be a hefty price tag in itself. You’re also accountable for homeowner’s insurance, possible HOA fees, a flood policy, property taxes and probably higher utility bills as well. If you need more time to pay off debt and get your finances in order, it’s best to wait until the time is right to buy a home.
You prefer not to be responsible for big ticket maintenance items. If the air conditioner unit breaks or you need to replace the hot water heater, those types of responsibilities fall on you. You’re now your own landlord.
Why is it Better to Buy a House than Rent?
It’s important to look at your finances and lifestyle and make sure you’re choosing the right option for you. Many people strive to purchase a home and feel like it’s the ultimate form of independence. However, that dream may not be accessible for the moment if you’re always moving around or you won’t be home enough to maintain the home and keep it up.
Is it better to rent or buy a house? It’s better to buy a home if:
You plan on staying for at least five years and you’ll be able to maintain it inside and out
Your debt is paid off and you feel like you can afford it
You want to customize and renovate it
Buy and Rent a Home with Royal Shell
If you’re not sure which way you should go, our real estate agents can sit down with you and answer your questions and help you work out your hesitations. If you decide to buy a home, we are more than happy to help you look. If you choose to rent a home, we have a great short and long-term rental program. Let us know if you’d like to learn more about renting. Whatever you decide to do, Royal Shell is here to help.
We also have a rental management program if you’re thinking about purchasing a home to rent out to guests as an extra source of income. We can manage reservations, market your property and collect payments. We’ll also make sure your home is maintained. All you have to do is sit back and relax. We have more than 2,000 rental properties in our program, a 10-year owner retention average, we’re experts at getting repeat bookings, and we manage homes rented by more than 300,000 guests each year. We’ll give you the treatment you expect and the treatment you deserve.