The decision between renting and buying may seem like a hard one, but that’s because it is. There are many factors that go into the decision to buy property versus to rent, ones that could affect you or your family’s future. I’m going to lay out some pros and cons of renting and buying so that you can make the most informed decision possible.
There are plenty of positives to investing in a property. For someone who is ready to settle down and raise a family or simply put down roots in a community that they see as a place they would like to make a long-term investment in. The Houston market is hot right now. According to the Houston Chronicle, home sales rose for the seventh consecutive month, especially for mid-priced single-family homes between $150,000 and $500,000. This growth is driven by increasingly low mortgage rates: on average, a 3.65% on a 30-year fixed-rate, 1% lower than this time last year. Another pro to consider when purchasing property is the fact that doing so builds equity. You’re not only investing in intangible benefits like stability and community, but also wealth- and equity-building. This is in great contrast to renting, because while you do that, you’re building none of this. While this doesn’t necessarily mean you’re “throwing away money” like some purport, it is something to think about when considering the long-term ramifications. Sometimes your mortgage payment can end up being even lower than a monthly renting fee, while also having the ability to do whatever you want to the property: paint, remodel, rent to others, etc. Ultimately, at the right stage in one’s life, buying a property is a very smart choice. It is an investment that builds not only wealth and equity, but stability and the ability to create a home and an environment that is perfect for you. This has so many benefits beyond wealth, like better a better lifestyle.
Despite all of these positives, there are some things to consider before buying a property. There are lots of unknown costs when it comes to owning a property. As the property owner, you are responsible for any maintenance, potential liability, and any other sort of expense that may not come to light until after you purchase the property. It is important to be aware, and be prepared, for these costs. With proper planning beforehand and good financial decision making, though, these costs are not detrimental to owning a property and could, in fact, help you improve the property before you resell it. There is also the possibility that your mortgage could end up being more expensive than renting. Additionally, the housing market is always fluctuating, and the value of your property could go up or down depending on many different factors. That’s why it is important to research the area in which you wish to move to be prepared for any sort of future fluctuations that could raise or lower the value of your property.
On the flip side, one of the biggest Pros of renting a property is flexibility. This is what makes renting a great choice for those who are not sure if they are ready to settle down and invest in a property, for numerous reasons. Each time your lease ends, you have the opportunity to move somewhere else. This could either be because of a career move or simply an upgrade to a better neighborhood or nicer property. Additionally, when you’re renting a property, you know what you’re going to be spending on rent each month. The landlord or property manager will cover any sort of maintenance that might come along with the property and, as a tenant, you are not obligated to pay any sort of property taxes. However, this flexibility can also be considered a con. Rent can increase when your lease is up. The landlord or property manager can sell the property to a different management company, which can be good or bad depending on who is taking over. These unknowns are definitely cause for consideration.
There is no single answer as to which one is better, renting or buying. There are times in a person’s life where it might be better to rent or buy depending on their circumstances. What you should do is evaluate your situation accordingly and find out what is best for you and what you are looking for at the current phase in your life. It’s also important not to just consider the financial aspects, but the personal aspects as well. Are you looking to settle in one area? Are you stable in your career or looking for opportunity elsewhere? What are you looking for in a community? All of these questions and more can help you decide what is best for you. While buying a property can be a daunting prospect, the best way to begin this lifechanging process is to be prepared. Being prepared can simply mean knowing where you want to live, but it also means knowing the financial ins-and-outs of the process so you, as a home buyer, can be as prepared as possible. This preparedness will make the process much smoother and much more pleasant.