In the long-running debate of renting and buying we often feel strayed in judging what the right choice is. Bachelor or with family, the fix between renting and buying a place has always been seen with apprehension. Keeping aside the pros and cons, it would be wise to look into the pretext of renting or buying a home from different perspectives.
Here are a host of factors one needs to consider before buying or renting a property.
Current Market scenario:
At any given point of time take into consideration the existing market scenarios- for example fluctuating markets, dynamic immigration policies, political unrest, etc can shelf the idea of buying a property for a few months. Buying a property may not fetch when the market conditions are unstable, when interest rates are fluctuating, and when there is a looming global economic crisis. On the other hand, renting a property in a scenario like this is much simpler and hassle-free.
Meanwhile use this time to research the prevailing prices, listed houses, prices vs. the budget, area where you want to buy and also go ahead to see some properties. This time can be used wisely to explore from all possible angles such as location, proximity to schools/workplace, hospitals, airports, etc.
Buying a property means a truckload of planning and liquidating all your savings too. Having a down payment amount of 3-20% should not be our prime reason for buying a property. At times, though we have enough savings to buy there is every need to analyze the attached ownership costs such as property tax, mortgage interest rates, payment terms, etc.
Non- Financial factors such as professional commitments most likely bind us to a certain place either for the long term or for a short term basis. If it is a long term/permanent position then buying a property is a feasible option, otherwise, it is recommended to wait till you settle down work-wise. On the other hand, renting a property on a monthly extension is good, keeping the tenure of the project in mind.
Any future movement on cards, then hold the idea of buying a property. All possible relocations in a timeline of 1-3yrs should be carefully evaluated. They can be marriage, spouse’s work, future education, job change, visa restrictions, etc. If there are no such changes then you can give a thought on buying a suitable property.
Buying Vs Renting: Calculating the costs
Buying or renting, only a strict credit-debit consolidation will lead us to the decision. While buying gives us the homeownership, it also leaves us with monthly mortgage payments, high maintenance costs, home insurance premiums, property taxes, additional costs like new furniture, upgrade equipment like lawn movers are also some frequent purchases for a new homeowner.
On the other hand, renting needs a careful assessment of leasing costs, water, gas, electricity charges, and security deposit. Unlike in buying the rental properties do not have any additional set up costs.
While buying a house, the buyer needs to consider if they are eligible for a tax deduction on the paid mortgage interest. Another potential red flag a homeowner should thoroughly review is the seller’s disclosures and a proper home inspection before signing off.
Want flexibility? Moving to a new city on a contractual role or an unstable job role, then it is wise to rent. During this period, get a hang of things around, be more insightful on choosing a home in the future and also look at various available purchase options.
Keeping the life stage in mind
The idea of buying or renting can also be broken down more intricately on the stage of life one is currently in. A person having a family with kids, a concrete job, in the 30s inclines to buy a property than rent, for he/she would like to look at permanence in life. On the other hand, a bachelor in his first job would have a long way to go, and hence a rental location would serve his purpose better.
A single divorcee will have different goals in comparison to a divorcee with kids. Hence, it is advised to take an informed, mindful decision than having a buyer’s remorse at a later date.
Bottom line: Draw a truce and examine all the factors closely, at the end the one cardinal thing is to do what’s best for you.