Smart real estate moves: When to buy or rent
Home ownership is an alluring prospect, and in many cases, it can be the cornerstone of wealth. However, making the commitment is only a good idea if it serves your overall financial plan and your situation.
Similarly, renting can have other financial benefits and could help you achieve your goals in different ways.
There are pros and cons to both renting and home ownership. Let’s look at how to determine which one is right for you and could help further your financial goals.
Factors to consider
The first thing to ask yourself is what your housing needs are and what your current financial situation is? This will help you determine whether you want to settle down and plant roots by buying or you’re still unsure and would benefit from the flexibility of renting.
Here’s what else to consider once you’ve weighed up the pros and cons:
- Can you afford it?
Is your income stable, and do you have savings and a good credit score? If you want to buy, will you have enough to secure your property and manage homeownership costs?
- How long do you want to stay?
Is this an area you want to stay in for a long time and perhaps raise a family, or are you unsure of where you’ll be in the next few years?
- What is the most cost-effective option?
It’s important to evaluate your options as markets differ and prices are cyclical. Rent could be a smaller monthly expense, but if you need a big property with rent almost equivalent to a bond, it might make more sense to buy. Similarly, if you can afford a big down payment and a smaller mortgage, buying could be easier on your budget.
- What lifestyle do you lead, and what are your goals?
Are you looking towards the long term and wanting to invest in something that will create stability for your family and an asset that could appreciate and be sold later, or are you a digital nomad who travels to different cities a lot and would benefit from the freedom and flexibility of renting?
Decided to buy after weighing the pros and cons? Let us help you with a home loan solution.