Should I Rent or Buy a House?
If you’re thinking about buying your own home this year, the question “Should I rent or buy?” has probably crossed your mind. The answer to this question isn’t always cut and dry. For some people renting is the better option, for others, buying a house makes more sense. It all depends on your situation. Before you make a decision to rent or buy, here are some important factors to consider:
Length of residence
One of the biggest things to consider when deciding whether to rent or buy is how long you expect to stay in the area. If you anticipate moving in a few years, renting is probably the better option. Should you decide to move, you won’t have to worry about selling a house before you find another place to live. However, if you plan on staying in the area for a longer period of time, buying a house is probably the most beneficial and cost-efficient option.
Job stability is another big factor to consider. If you plan on changing careers or relocating to a different area sometime in the near future, renting might be a better option for the time being. If you have a good job in an area you like, you may want to consider buying your own home. Being able to demonstrate a stable job history on your mortgage application will indicate to lenders that 1) you have a reliable source of income to repay the loan and 2) that you are committed to your career.
Cost of renting vs. buying
In today’s housing market, the cost of buying a home may actually be cheaper than renting. Use our “Should I Buy or Rent Mortgage Calculator” to estimate the cost of renting versus buying in your area. In some cases, the monthly mortgage payment may be the same amount you are currently paying for rent, or lower! You won’t necessarily need a large down payment, either. There are low-cost down payment options available for homebuyers.
Affordability of housing
Although the value of homes have increased since the housing market crash of 2007, home prices across the country are still much lower than pre-recessionary levels—especially in Metro Detroit. Since interest rates and home prices remain low, more people can afford to buy a home. Within the last couple of years, we’ve been able to help many buyers get into homes for equal to, or less than, what they were paying for rent.
Availability of rentals
Right now, there’s a shortage of rental properties in the Metro Detroit area. After the housing market crash of 2007, there was a large demand for rentals. Since then, rental rates have increased and available rental properties have become harder to find. If you are lucky enough to find a house to rent, it may actually cost you the same amount as a monthly mortgage payment would.
Benefits of homeownership
Homeownership also comes with many benefits that renting cannot offer, such as tax deductions and the ability to build equity in your home. Unlike renting, you have the ability to pay off your mortgage loan so that you don’t have to pay rent when you’re retired.
Although this list is not fully inclusive, it does cover some important factors you should take into consideration when deciding whether to rent or buy.
What other factors do you take into consideration when deciding whether to buy or rent?