As the blog is growing and my readers are connecting and asking more questions, I am going to start a new series on the blog and maybe carry it into the upcoming podcast.
Each week I will either have a guest blogger or a question from my readers that they can ask and I will try and answer to the best of my ability! Please keep the questions in line with the blog!
If you have a question you want to ask or an idea for a post you would like to read, head over to my facebook page and send me a message with your idea or question! I cannot wait to hear everyone’s ideas!
Is It Better To Rent Or Buy
I have struggled with this question for awhile as I thought I already had the answer, but as I grow older and my thoughts and financial maturity grow, I think my original opinion is changing! Maybe it’s just the lifestyle that my wife and I are currently living in.
I have also read and talked to a few bloggers- one being briefly to J. Money from Budgets Are Sexy- concerning the topic of renting vs buying a house!
I can tell you in the personal finance world I feel like every blog I read says to purchase a house so you are not throwing money away with rent….but are they right?
Renting A Home
Renting, at its core, is paying money for a place to live that isn’t your own and where you do not have to do the house’s maintenance. Generally speaking, renting has a higher price-per-month because you are virtually paying for someone else to do all your repairs, and you are paying for the rental’s owner to make a profit.
While this is by no means bad, it does bring into light that at the end of the day you can walk away from that property and have nothing to show for it.
However, this can also be the biggest benefit of renting!
Many rentals are in a year contract and then, if you were a good tenant, often times the landlord will give you a month to month agreement. Sometimes this is not the case, but around here that seems to be the general agreement.
But you are free to leave at any point in time if you get bored with the place, change jobs, find something cheaper, or just plain want a change!
Another added benefit is that you do not have to repair major things that can really blow your budget to pieces.
Owning A Home
Let’s get the obvious out of the way. You took on a risk that this house would be a good financial asset down the road, and you are building equity in each of your monthly payments!
This is why everyone says you should buy because at the end of the day, when you sell your property, you will get your money back and hopefully a profit. If you choose not to sell, but continue making payments on your mortgage and finally pay it off, you no longer have to pay for the house you continue to live in! Because of this, you did not “waste” that money with renting.
Now you own some property that should sell for a value equal or greater than what you paid for the house as you should have been making improvements and upkeep happening. However, it also means you are stuck or locked into that house until you can sell it, and you never know what the market is going to do!
So Which Is Better
Here is the clique answer, and I promise I will expound on it since you read this far!
It really depends on where you are at in life!
ok, ok I know anyone could have answered the question that way, but I am learning that owning a house is not always the best option for you!
If you are willing to stay in one location for at least 5 years and can find a house that’s in your price range, then I truly think purchasing a house is the way to go! This way your house payments will be cheaper than the equivalent house payment for rent (at least it should be if you put a downpayment on it).
Another reason you should buy over renting is if you are in an area where the market has crazy low-interest rates, and houses are in an abundant. In this scenario, find one that you can envision yourself living in when it’s fixed and buy that one!
Side note: I am a prime example of this. Don’t buy for easability and because it’s already all fixed up! You and your spouse will reason that the extra money you’re paying is worth it. However, a year later your opinions will probably change!
Instead, if possible, buy something that can be fixed into what you want! This way you have sweat equity in the house and the likelihood of getting a return on your investment, even if you have to sell under 5 years, is high!
And the one we have all been waiting for….
Renting has its pro’s
- Not having to fix big issues
- Fixed amount no surprises
- Freedom to move when your wanting
- If you have debt it will be easier to rent than buy a house!
So Seriously Which Is Better…
For me, while renting gets a bad rap from most of the finance community, I will be one of your few that stand out and say I am not sure buying a home is for everyone. Even for young married couples in general, if they are indecisive, struggle with doing their own repairs, and have a large amount of debt, renting maybe the best option!
By age 23 who seriously has come up with their life plan…
Which is better for you Renting or Buying? Leave me a comment then head on over to my facebook page to see the discussion there!
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