The decision to rent versus buy can be difficult to make, particularly for those who live in more expensive or urban areas. With pros and cons to both, the following guide can help you determine whether it is better to continue renting or it’s time to buy.
- What can I afford?
- Do I want flexibility or stability?
- How long do I plan to stay here?
If you plan on staying in a city or home less than two years, renting makes the most financial sense. Plan on staying longer? Consider buying. However, for homeowners to build enough equity to make their investment worth it, it is recommended to stay in the home for at least seven years.
- Do I want to be responsible for repairs?
Hot water stop working? Roof starting to leak? Faucet won’t shut off? If you’re renting, these problems can easily be fixed by calling the landlord. However, as the homeowner, all manner of home repairs suddenly becomes your responsibility. It’s important to consider whether you have the time, skills, or funds necessary to repair and maintain a house beyond its purchase before buying a home.
- What are my future goals?
Think about your future goals when comparing renting versus buying. Buying a home can help you build equity and credit – but leaves you tied to one place for a long period of time. While it has fewer upfront costs and significantly less paperwork, renting can be complicated by bad landlords, a lack of choices, and more.
The decision to buy versus rent is ultimate a personal choice. With no cut and dry answer, it’s important to consider a variety of pros and cons before determining what is right for you.