Which is better, buying or renting? The debate rages on with proponents on both sides of the argument, but picking a side isn’t as cut and dry as many would like you to think. It’s a decision you’ll have to make every time you find a new home, so what is the answer?
The truth is that you’ll have to make that decision for yourself based on a number of factors. Weighing the pros and cons of each is essential if you want to find a home you’ll love. This article weighs the pros and cons of buying vs renting to help you make the best financial decision.
Both Have Their Flaws
Homeownership was considered the best option financially until the housing crisis of the early 2000s. Owning a house used to be a measure of income status and an excellent investment with several perks. Today, investing in a home can be a financial trap.
Renting is considered by many to be the better choice, especially with new luxury options like the Bellevue WA apartments. While it is more popular today, there are several downsides cited by critics. Restrictions on decorating and noise levels inconveniences like community laundry and the cost of your rent are all factors worth considering.
Each might have their downsides, but the real answer to the rent vs buy debate comes down to individual factors. The first factor to consider is how long you intend to live there. Renting is an obvious choice for the short term, but keep in mind that the costs of homeownership spread out after seven years. Based on your income, which is more financially feasible?
You’ll also want to consider the area you’re looking in. Either a house or apartment in Los Angeles would be an astronomical expense for many, but apartments in Northridge offer a cost-effective solution that keeps you centrally located to LA.
What about the down payment needed on a home? Would it make more sense to invest that money in the stock market, a CD, or a high yield savings account? Then again, would the down payment on home leave you with a mortgage that costs less than a month’s rent?
Even with higher rent, many find that they still pay less when factoring in maintenance costs. Upkeep and utilities are often covered by rent but are something homeowners must pay for themselves. However, proper upkeep on a home can increase its value if you decide to sell later. There are also tax incentives for homeowners that renters miss out on.
So, What’s The Answer?
The real answer to the rent vs buy debate is found by rephrasing the question. Which option is best for you? Your current financial situation ultimately decides what you can afford now and continue to pay for in the future. So does your attitude towards settling down or leaving the option of moving open.
While there is no clear-cut answer for everyone, you can determine which option would leave you with a home you love to live in based on the factors above. Don’t listen to the hype. Make the best decision for you and your needs.