There are many things that need to be taken into consideration when you are thinking about buying or renting a home. Forget asking friends and family because they are biased in giving advice. Even though renting may have been a good option for them it may not be for you. It is crucial to consider where you are, what you want and the economy as it stands currently. Below you will find some questions to ask yourself when coming to an end decision in the great debate between buying to renting a home.
1) Ask yourself how long you plan on being there?
If you aren’t planning on staying in your home for more than a few years it may not be a good option to purchase a home. Consider your job situation. Are you planning on being promoted? With the promotion will you be required to relocate to a new work location that will require you to move? No one can predict a housing bubble.
There are no guarantees that the value of your home will increase significantly in just a few years of ownership. Often times the market can see a decline. If you plan on living in your home for more than a few years you will be able to sit these ups and downs in the market out. However if you will faced with a move in a few years you make end up selling at a loss. Buying a home is a gamble if you aren’t looking to stay put for more than a few years.
2) What will be the total costs associated with owning the home?
When buying a home take into consideration all of the costs associated with the process and compare them to the costs of renting. You will also need to consider the possibility of market increase or decline within your equation to consider if you will lose money, break even or profit on the endeavor. Consider the taxes, insurance, utilities, maintenance, mortgage payment, interest costs and anything other amount of money that will go into the home. Average this amount out amongst the number of months you plan on living in the home you will get the monthly amount it will cost you to live in your home. Then consider the following question.
3) What are the total costs associated with renting the home?
To compare you need to take into the cost of your rent payment, insurance, utilities and other expenses associated with renting a home or an apartment. Once this is added up through the same process that you applied above you will have a comparison on which to base your monthly outlay. This financial difference will give you an understanding on where you will be further ahead with renting or buying.
The difficult part will be knowing what the value of the home you are renting or buying will be at when you need to move. Will it be astronomical to buy a home after renting for a few years? Will your home have doubled in price in a few years when you go to sell? This element is based off of past averages so it is a rough estimate at best.
4) Are you ready for the responsibility that comes with home ownership?
This is only something you can answer. Owning a home is a big deal but then so is renting a home. In both situations you need to upkeep the property, pay your bills and create a space that is your own. To do this there will be some expense involved. The main difference between owning and renting is this; when renting you are not building equity however someone else is paying for the major repairs while when buying you are more likely than not building equity and have the expense of repairs that come up.
Only you and you alone know whether buying or renting is the right decision. Most often buying a home is advantageous over renting especially if you plan on staying in the home for more than a few years.
Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. More information can be found at http://www.ladyofthelakes.com.