Buying vs. renting [Infographic]
You've probably asked the following question to yourself a handful of times in recent memory: Is it better if I rent or buy a house?
But that's an answer only you know the answer to. There is no right or wrong answer because your circumstances will be different than someone else's. One area most people can agree on is that rent prices are increasing at an alarming rate in many popular cities across the country.
Now is the time to decide whether you should continue to rent or transition into being a homebuyer.
When to rent
Renting is ideal if you need the flexibility because you're unsure of what the next six months to two years will hold for you. Because of this distinction, renting is popular among younger generations. If you're a recent graduate and are itching to move out of your parents' house, you'll likely look to rent first.
Additionally, you may not exactly have your life totally planned out. You're either switching between jobs or living off of limited income, which can translate to you always moving. By choosing to rent, you can find a place with a few roommates and still be able to afford that living space.
Finally, renting frees up your budget from costs associated with owning a home. You won't have to pay property taxes, expensive repairs or any other maintenance costs. When you're renting, all you need to worry about is the monthly payment and utilities.
When to buy
Buying a home is ideal if you're ready to settle down and introduce some stability in your life. When you can envision yourself staying in the same city or town for at least five years, buying a home will make more sense financially.
You'll first have to save up for the down payment, ideally around 20 percent, although some mortgages may let you pay less. You may even discover that monthly mortgage payments, which include interest, can actually be less than what you're paying in rent.
Not only will you own a home, but you'll also build equity, which can come in handy later on if you need to remodel your home or build an addition.
Buying or renting is a decision only you can settle on. There are considerations you have to take into account for both because circumstances will differ.
