There is no easy equation for figuring out what is the best move. Every family has different needs, in terms of location and lifestyle. When it comes to renting vs buying a home, there are so many factors to consider that it’s impossible to boil down into a simple decision. That said, these four points will hopefully give you some helpful insight on when renting makes sense, and when it’s time to buy!
1. How much can you afford: Before you decide whether or not buying or renting is right for your family, take a look at how much money you’re able to put towards real estate. In general, most families find that they can cover the costs of owning rental properties with their current income. However, for some families, this is not the case. A recent study by the National Association of Realtors found that on average, U.S. households spend 50% of their income on housing costs, and only 3% of homebuyers and renters put all their money towards a down payment. The rest is used to pay rent or mortgage payments, and other living expenses! When purchasing a home, it’s important to calculate your payment to get a better idea of what you are getting into.
2. What are your long-term goals: When looking at renting vs buying a home, you’ll notice that you need to budget for both short- and long-term goals. For example, if you’re planning on moving in a few years, you may want to consider renting a home. While it can be difficult to make this decision, renting provides you with more flexibility and freedom. In addition, if you’re planning on staying in one location for the long haul, then it’s definitely time to buy!
3. How is your credit score: If your credit score is low or average, then purchasing a rental property can be extremely stressful. If your credit score isn’t great but your income is substantial enough to afford a down payment and monthly mortgage payments, then you may want to consider buying instead of renting.
4. Where you live: There’s no doubt that some places are better to buy than others. If you live in a big city with high cost-of-living expenses, then it may make sense to rent. That said, if you live in a place with low taxes and stable home values, then buying may be the right choice for your family. This is why it’s so important to check your credit and stay informed on housing news in your area!
As you can see, there are many factors to consider when trying to decide what is the best move for your family.
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