Renting Or Buying A Home: Which Is Right For You?

Determining whether you are better suited to a rental property or home ownership can include the consideration of many factors. The most obvious question concerns your finances, since buying a home can require you to shell out anywhere from 4% to 20% of the total cost up front (plus closing costs, insurance, and taxes). And while rentals often require a sum that includes the first and last month of rent, as well as a deposit, this number usually doesn’t come close to your initial payout for a home purchase. Of course, it’s not all about your financial situation. There are a lot of other factors to weigh when sorting out your living situation.

Home ownership is not only expensive; it also requires a lot of attention and effort on your part in terms of maintenance. For example, you’ll have the immediate responsibility of keeping your home clean and your land tended (gardening, watering, etc.). Then there is annual upkeep to consider (such as draining your water heater, having your AC unit and furnace serviced, cleaning the rain gutters, spraying for bugs, and maintaining clearance on your property line). And don’t forget any unexpected mishaps that might pop up, such as a leaky roof, cracks in the foundation, pests, or mold (just to name a few). Whether or not you have the disposition to deal with all of the headaches of becoming a homeowner is something you should take the time to consider. Even if you do feel prepared to tackle the many demands of running a household, you may find that you simply don’t have the time. A demanding job that keeps you working long hours or constantly traveling may make the prospect of home-buying a bit more complicated.

On the other hand, renting could present just as many difficulties. Unless you’re lucky enough to live in a rent-controlled facility, you may find yourself subjected to constant and arbitrary hikes by the landlord. And while you are not responsible for tending a lawn or seeing to plumbing problems, you may find that you have to wait around for supers who are always too busy to deal with you. Then there are the neighbors to consider. Living in an apartment building or even a duplex could mean you’ll spend many a night listening to loud music, thumping, or crying kids through paper-thin walls. In short, owning a home can have its headaches, but renting can be just as bad, especially considering that the money you spend will never come back to you.

While it seems to be a toss-up as to which avenue is the better choice, there are just a couple more things to contemplate. One is the market. First-time home buyers may want to take advantage of the fact that the real estate market is currently flooded with foreclosures, meaning that buyers can get into a property for sometimes outrageously low prices (and if they can wait it out for a few years, they stand to show a sizeable return on investment). You will also want to consider your future. If you plan to remain a bachelor (or bachelorette) for the foreseeable future, then a rental might suit you just fine. If, however, you’re planning a family, then perhaps a house with plenty of bedrooms and a yard to play in will better meet your prospective needs.

Kathleen Mackenzie writes for Mortgage Broker where you can compare thousands of mortgage deals to find the one that’s best suited for you.