Owning your home is a financial achievement that many people strive towards. However, even though owning your own home has many benefits, it can be a tough goal to reach. Additionally, there are certain scenarios where it actually makes more sense to rent. So if you’re wondering, “Should I rent or buy a house?” how can you identify whether renting would remain beneficial to you? Here’s when it makes more sense to rent rather than buy a new home.
One of the biggest reasons why it might make more sense to rent rather than buy a home is if you’re only planning on staying in a location for a short period of time. Buying a home is a huge commitment, with some mortgages extending for decades. As a result, when you buy a home, you need to be sure that you’re going to stay in that area for an extended period of time. On the other hand, renting allows you to be much more flexible. Leases usually only last for a year and are easier to get out of, meaning renting is a much smaller commitment. If you’re moving to a location for only a short period of time or simply don’t know whether you want to make an area your permanent residence, then renting is the way to go.
Another major reason why renting may be a better option than buying a house is your financial situation. Although your mortgage costs and rent prices may be similar, you don’t need to have a down payment to rent a location. However, when buying a home, you’ll likely have to put around 20% of the total cost down as a down payment before you can secure the mortgage. Since homes usually cost hundreds of thousands of dollars, a down payment will likely amount to thousands of dollars, something that you’ll have to save up for. If you don’t have that kind of money laying around and need more time to save up for a down payment, then renting a location for the foreseeable future is your best option.
Maintenance Time and Costs
A very underrated reason why renting may be better for you than buying is the time and costs that need to go into maintaining your property. When you own your own home, maintaining your house and its property is your responsibility alone. Not only does it take a lot of time to maintain your property, but you’ll have to spend a lot of money on products and tools to help you get the job done. On the other hand, when you rent a property, your landlord will take care of the vast majority of maintenance tasks, eliminating a big worry for you. If you’re at a point in your life where you just simply don’t have the time and money that’s required to maintain your own property, then it’s probably best to rent for a little while longer.
The housing market often goes through various trends that will either favor the seller or the buyer. At certain points, the housing market greatly favors the seller, causing housing prices to rise and inflate. Although it is certainly possible to buy a home in a seller-friendly market, it is not ideal. Buying a home in the wrong market could force you to spend a few extra thousand dollars, which some people can’t afford. As a result, if the market doesn’t favor home-buyers, then you may want to rent for a little while longer until the market shifts in the buyer’s favor.