If you are wondering whether or not you should rent or buy a house, you are not alone. There are plenty of real estate markets that offer housing prices with mortgages that are less than what you would pay to rent. But that isn’t the whole story. Let’s take a look at reasons to rent and to buy a home, considering things like down payments and consumer debt.
How to Manage Debt & Real Estate Decisions
When deciding whether to rent or buy, there are many factors to consider, including if you are currently trying to eliminate debt. Since everyone’s situation is different, it’s best to do a lot of research, talk with people who have been through it and make sure you are aware of your own personal financial situation. To get you started, here are some reasons why you should rent and reasons why you should buy a home.
Reasons to Rent a Home or Apartment
Renting a house or apartment has its perks. These perks are often the reasons why it’s a better choice than purchasing a house.
- No savings for a large downpayment
- No home maintenance costs (typically)
- Potentially living in a more desirable area than if buying
- Short-term plans to live in the area
For the reasons above, renting is a great choice for many people. If you are young and transient, trying to eliminate credit card debt, or just not ready to commit to a long-term housing solution, renting is the right option. Renting is not a bad thing, although it’s often seen as less prestigious than owning your home. Don’t let that trip you up! Homeownership is not something for everyone and it’s not a guarantee in life. Renting also allows you to focus on paying off any consumer debt you may have.
Reasons to Buy a Home or Apartment
There is something very desirable about owning your own place. Paint the walls any color you want, customize the decor, and know that you have roots in a community.
- Saved enough for a downpayment
- Saved for additional maintenance costs
- Secure employment
- Long-term plans to live there (5+ years)
- No credit card debt
Some financial experts advise having no debt, good or bad, before trying to own a home. Evaluate your own unique situation to decide if paying off your debt first is the best choice before buying real estate. If you wold like to read more about renting verse homeownership, try CNBC’s article “Rent or buy a home? What millennials need to know” or check out ACCC’s Homeownership & Financing Pinterest board.
To speak to a credit counselor today about budgeting and managing your finances, call 800-769-3571.