There is no pressure like the pressure to buy a home. It’s seen as a hallmark of being a true adult. There’s pressure from friends, pressure from family and parents, pressure from society to hit that milestone in a big way – even if homeownership is at its lowest point in half a century. You may be at the point where you’re looking at that monthly rent check and feeling a little resentful, or watching the DIY shows and saying, “I could do that!” However, you may be better off renting than buying. It’s not a popular point of view, but there are certain factors that dictate renting in some markets and some situations for at least a little while longer.
There are also pros and cons to renting versus buying that you want to consider before parting with a large chunk of your savings for earnest money, down payment, closing costs, and all the other expenses you’ll incur before even getting your name on the mailbox. Let’s take a look at some of the key ones:
|Renting Pro||Renting Con||Buying Pro||Buying Con|
|Cost is generally less than that of a mortgage + insurance + taxes.||Your money builds no equity. Your landlord can refuse to renew your lease.||Mortgage payments build equity and interest is deductible.||If you have an adjustable rate mortgage, your payments can suddenly increase.|
|The landlord or management company arranges repairs and maintenance and pays the costs.||Landlords may defer maintenance or do shoddy work in order to save money, or not effect repairs quickly.||You decide when and how and when to conduct maintenance and repairs on your own property.||It’s all on you. You pay for it to be done or you do it yourself. Repairs can be costly and time consuming.|
|You can give notice and move within 30 to 60 days of you don’t want to renew your lease.||Your landlord can refuse to renew your lease, and you have to hunt for a new place.||If you are settled in your job, you won’t need to move for some time.||If you suddenly have to move, you have to put the house on the market to sell.|
Don’t let anyone push you into a making a decision that you don’t feel ready to make. Nobody can make you drink the Kool-Aid. Buying a home is a huge commitment of time and resources, and you need to decide when you are ready to put down roots. Furthermore, there is nothing wrong with renting in a neighborhood that you are interested in before you start looking to buy. In fact, it may just be a very responsible choice. A neighborhood that does not fit in with your needs is not a place that you’re going to be happy. Think about your future for the next five years, and then sit down, go over your financials, and see what will work best for you.