Renting or Owning: Which is Better for Your Lifestyle?

Are you thinking of buying your own home or renting first? Read this before you make any decisions!

Photos By: Demesne

Geographic Flexibility

It’s unlikely that buying a home now and selling it in a few years will be profitable. If you would prefer to have the freedom to relocate given your job or family obligations in the near term, it might make more sense to rent rather than own a home. If you continue to rent, you will continue to have the option to pack up and move across the country at a moment’s notice.

Location is Key

Location is an important thing when one is considering buying a home. Homeowners are often forced to live in the suburbs or further from the areas they consider the most desirable, whereas renters are able to take advantage of the lower sunk costs to move immediately into the places they so choose. This is one of the most important factors when finding the perfect apartment.

Emotional Considerations

Even if one has the ability to achieve home ownership, one should consider the emotional toll of tying oneself down and restricting one’s future dreams and goals. You might be a financial executive today, but if you want to pursue your dream of being a musician or artist you might find that home ownership disallows you from achieving these future goals.

Stability vs. Flexibility

Despite what the media pundits purport, the American dream is not dead. The dream is whatever you make of it, whether that be pursuing your childhood dreams or settling down in the suburbs. A lot of these goals will require a considerable financial investment. If you someday want to start your own business, plan your dream wedding, or travel the world, then throw all your savings into a home may put you in a very compromising position. If you are a first time buyer make sure to have an appropriate future plan for what you want with your home.

Are you Wasting Your Money?

Many financial advisors consider the biggest myth surrounding renting to be that renting means that one is simply throwing money away each month. Even though a renter is not accruing home equity by virtue of paying monthly rent payments, those who decide to purchase a house are also not building much equity these days by owning a house. In fact, today the overall cost of owning a home tends to be higher than the overall cost of renting, even if one is to consider that the overall cost of a mortgage payment is similar to the overall cost of rent. There is a lot of advice out there for people who have to decide between renting and owning. Do some research before committing to a decision.

Financial Predictability

If you decide to rent, you know exactly how much you are going to be owing each month. If you decide to purchase a home, on top of mortgage bills plus home and auto insurance, you might have to suddenly owe $10,000 for a new roof or $5,000 for a new surface for your garage floor. Wear and tear is not something that renters have to consider. Even things related to renters insurance tend to be far more predictable than the costs associated with homeownership.

Leisure Time

If you like having your weekends and evenings free, the associated costs of home ownership might be less appealing to you. For homeowners, there are always projects around the home that requires that you put in extra hours to make sure that your living space is well maintained and comfortable. Especially if you work long hours or travel frequently, you might find that having to fix every tiny problem in your home might be excessively complicated or time-consuming. Those who rent do not have to worry as much about these considerations, and may find more freedom in their personal life.