So you’re ready to strike out on your own, are you? When it’s time to settle down, there are two options you have for a home: rent or buy.
But which one is right for you?
The answer to that is…it depends.
In the debate between rent vs mortgage, each one has its pros and cons. There are differences enough between the two that only you can figure out which one is right.
What follows is a quick guide to renting a home versus buying one, and some of the things you need to consider. It’s a big decision, so it’s worth finding help and weighing your options.
Let’s compare your choices!
What’s Your Budget?
The first important thing you need to determine is how much money you can bring to the table. This may seem like a no-brainer, but a lot of people have trouble determining exactly how much money is available to them.
That’s what makes a budget so important.
By budget, we don’t mean simply how much you’re willing to spend on a home, but your total financial outlook. Sitting down and evaluating your total financial picture can go a long way in helping you figure out rent vs mortgage.
The good news is that it’s very simple.
All you have to do is figure out what you can afford — and not afford — is to take all of the money coming into your household. This includes jobs, annuities, severances and anything else that brings a monthly revenue. Then subtract what goes out in bills each month and voila!
In order to do this correctly, you need to be honest with yourself. The more accurate you are (did you include that latte every morning?), the better your overall picture will be regarding rent vs mortgage.
Predict Your Future
This, on the other hand, is the difficult part. Do you have your crystal ball at hand?
Just kidding. But you should have some idea of what your future looks like. This is because the longer you’re going to live somewhere, the more buying a home will make sense. If you have a steady job and see yourself settling down for a long time, then buying should be your priority. If, on the other hand, you aren’t sure where you’re going to be in five years, then rent may be the answer.
Use this handy calculator to play around and see for yourself.
Deciding between Rent vs Mortgage
Again, each choice has its pros and cons.
With renting, you have flexibility. You can move whenever you want, upgrade or downgrade living areas as your money situation changes. This option provides a freedom that buying may not. But your money isn’t going toward anything.
Buying a home gives you the opportunity to create equity and build wealth, but you may have trouble selling if the need ever arises. In the debate between rent vs mortgage, only you can really know what’s best. So do your research, ask questions, and soon you’ll know what to do.
For more on this subject read our recent blog, “Tips For Finding a Real Estate Agent”
Thinking of buying or selling a home in the La Jolla area? As consistent top producers in real estate, Linda Daniels and The Daniels Group are your La Jolla housing specialists. Our team of local experts will ensure that you have a successful real estate transaction. Call us today at (858) 361-5561 or email us anytime by clicking here.