Rent or Buy?: Personal Finance

If you’re a renter, you’re probably eyeing the real estate market with great interest right now. It seems as though people are practically giving their homes away in an attempt to avoid foreclosure, and there is a good chance that this has grabbed your attention.

On the other hand, if you’re a homeowner, you may be longing for the days of renting when it didn’t really matter if the place you lived depreciated in value and if something broke you could always call the landlord to get it fixed.

Yes, the grass is indeed always greener on the other side of the fence.

Whether you should rent or buy depends largely on your situation. Here are some things to take into consideration before making your final decision:

1. Do you have money stashed away? Although you probably get a great deal on a house right now, you don’t want to sign up to buy something you really can’t afford. If you are living paycheck to paycheck or if you’re constantly scrambling to cover your bills each month, now is not the time to buy a home.

2. Do you really want to own a home? If you have the money for a down payment, and owning a home is a goal of yours, this is a great time to buy a house. You may be able to find a house that is listed at less than its actual market value.

3. Would you rather not bother with repairs and all that jazz? Owning your own home can involve a lot of repairs and improvements that you either do yourself or pay someone else to take care of. If this doesn’t appeal to you, keep renting.

4. Are you ready to put down roots? Don’t buy a house if you plan on moving within five years, or even if you aren’t sure about your intentions. By the same token, don’t sign a long-term rental lease if you’re in this situation either.

Owning a home can be great. It becomes your home and you can decorate however you want while also enjoying a potential tax deduction. Renting has its merit too though, because you’re not entirely attached to the place you live and you can always call someone if something breaks.

Don’t get bullied into buying a home if you aren’t ready. There is nothing wrong with being a renter. Owning a home should only be a solid financial goal if it’s something you actually want, not something that is expected of you.

Bottom line: If you’re ready to buy a house, now is a good time to have a look around. Compare interest rates and terms vigorously and research the market trends of the area you’re buying in before committing to something. If you’re perfectly content with renting, then keep renting.

Do you have tips for someone considering buying a home? Let us know in the forums or the comments below.