Buying vs Renting a Home

When it comes to buying vs renting a home, there’s no one-size-fits-all solution. To figure out which option is right for you, there are several factors that need to be considered. It is crucial to be well educated on the financial and lifestyle advantages offered by both options, before making this important decision.

1.     Financial Factors:

Building equity is generally the first thing that comes to mind when thinking of buying a home­—and for good reason! As you pay off a mortgage, you are building equity for yourself, as opposed to building equity for someone else as a renter.

It’s important to keep in mind that market conditions play a huge role in any calculation related to real estate. Studying rental and homeowner vacancy rates in a specific region can help you gain insight into what kind of deal you’ll be getting. The lower the vacancy rate, the more you’ll have to end up paying for a property, and vice versa.

You also need to consider rental hikes and inflation. I’m sure most of us have had the experience of seeing our rent increased, often quite dramatically after just a year or two. Being locked into a mortgage is a huge benefit to owning a home. With a contract secured, not only are you building equity, but you are shielding yourself from inflationary pressures.

2.     Lifestyle:

Flexibility is a term largely associated with renting. Renters have more freedom to find a new home in a different city, county, or state. If you aren’t sure where you want to live or where your next job will take you, waiting to purchase a home could be your best option at the moment.

On the flip side the financial freedom of homeownership enables a heightened level of flexibility down the road. In a survey of 2000 renters, Trulia found the top regret for long-term renters was not buying a home when they were younger. Keep in mind that once you pay off your home, you can take the money you would have spent on rent and invest it into traveling, and other experiences that you may not have been able to afford otherwise.

At the end of the day in order to decide whether renting or buying is a better option, you must take all factors into account. Reaching out to a Realtor who can keep you updated on current market trends, offer personalized financial advice, and help you construct a timeline to homeownership can be enormously helpful! If you’d like to get in touch with one of our top realtors, give us a call at (952)-222-9000 or head to www.JohnSchusterGroup.com!