Many Americans are floundering to figure out what is the best decision to make regarding their living situation. Depending on you, your family, your plans, and where you live, it may make sense to buy or it might make more sense to rent. Ultimately, the decision comes down to you and what you want and value. Some people don't feel or understand the need to be a homeowner, some may think renting is stupid and a waste of money, both are correct.
So for you, should you buy or should you rent? Let's dive in
Short Term/Long Term Goals:
In order to really understand what makes sense for you, you have to evaluate your short term and long term goals. If you are looking to move within your city but only plan to be there for another year before you switch jobs and move to another state, then maybe it's not the right move. But, let's throw in the fact that you're also wanting to build long term wealth. Real estate has created more millionaires than any other industry through real estate investing, so with that being said, this purchase could jump start your retirement plan.
You may be someone that just graduated and landed the job of your dreams in your dream city, where you plan to plant roots and stay for an indefinite amount of time. In this case, it would likely make more sense to buy a home to grow with considering the rental rates go up each year, you don't plan to make any moves, and you know you like the city.
Some questions you can ask yourself are:
How long will I be in this area?
Do I have long term wealth goals?
Do the numbers make sense as an investment?
Will I be renting out rooms?
Your Current Market:
The real estate market you are in can heavily determine whether or not buying or renting is right for you. Once you have figured out if you want to buy or rent and why, you can then evaluate the real estate market you are searching in. What are rent prices? What are housing prices? Can you afford the mortgage if you found what you want and/or needed? These are all questions that will come into play.
If you're that person planting roots but a standard home in your city is upwards of $1M, it may not be feasible for you to purchase unless you change where you live, or save up enough to afford it. So you may HAVE to rent in order to stay in the place you've so long desired to be. Or maybe you're a young, single person who has longterm wealth plans but definitely won't be staying in one spot for the long term, you may find the perfect home that you can buy and rent out rooms, or maybe even a multifamily property that will turn into a heavy cash-flowing asset later down the road when you move out.
Ultimately, you have to evaluate the real estate market you are in to determine whether it's feasible for you and conducive to your lifestyle.
It Comes Down To How YOU Feel:
No one can tell you what to do at the end of the day. Whether I provide you a million reasons to purchase a home or a million reasons to rent, you can and will do whatever you feel is best for you. I've met plenty of people that are okay with moving every few years because they're renting, in return they do not have to worry about making repairs, renovations, or a big mortgage hanging over their heads. There are also millions of people who think it would never make sense to rent, if you can purchase a home and build equity and wealth through that.
Take some time to yourself. Review your financial situation, your financial goals, your career and life goals, and more. Then study your real estate market, talk to a real estate professional who is unbiased in your decision, and determine what route lines up best with your life.
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