I get questions often from readers about finances and how best to control debt. So, I thought I would start a series based on these questions. Today, the specific question I will address is:
Rent or Buy? That is the question!
Should I rent or buy?
There are a few things that one should consider when struggling with the question of whether to rent an apartment/townhouse/condo or buy a house/townhouse/condo. 1) Do you have enough to pay 20% down on a purchase? This has become even more important over the last several years as mortgage insurance is now permanent throughout the life of a mortgage if you do not initially put 20% down or refinance at some point throughout the loan. With interest rates at record lows right now, and these rates are likely only to go up, you probably will not want to refinance if you purchase at one of these record low interest rates. If you do not have enough to put 20% down on a purchase, it is the best option to rent until you are able to amass enough to put 20% down on a purchase. This will save you thousands in the long run on mortgage insurance premiums! 2) What is the real estate market where you live or are moving to? Is it growing? Are real estate prices increasing? This could prove to be a good investment opportunity if you are able to purchase in a growing market at a reasonable price. 3) Can you purchase cheaper than you can rent? Where do you want to live? Living downtown in a big city would likely mean you will be renting versus buying. Location! Location! Location! What will your daily commute be? Is traffic MAD?!?! Renting may be the way to go just for sanity sake! 4) How much space do you need? Can you get more "bang" for your buck in a house than an apartment? 5) Do you like "close" neighbors? Don't be fooled... Just because you buy a house and not rent, does not mean you are FREE from the meanderings of neighbors! A barking dog 50 feet away can be VERY annoying when the house next door decides to leave their dog out all day long! And, like family, you don't get to pick your neighbors.
The items above are just a few of the things that I have personally experienced regarding purchasing versus renting. Situations are always different for different people and every case is different. Each of us has to decide what is best for our particular situation. The items above are only meant as things for you to consider and think about when deciding whether you should RENT OR BUY!
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