Rent vs. Buy: Part 5 of 5
We’ve posed the question, “Is owning a home your American Dream?” and we’ve given you some food for thought to help answer that question. Now we want to wrap up the conversation by hitting on a few remaining questions about the rent vs. buy debate.
As you consider homeownership, take a look at these common worries:
Will Homeownership Be Too Expensive?
Finances should be one of your chief concerns when considering purchasing a house. If homeownership will absorb all of your savings or income, think twice before trading your future financial stability for a home.
Most experts suggest that your housing costs make up no more than 30 percent of your income. In the case of homeownership, that includes your mortgage, utilities and repairs. You can talk to people living in the neighborhood you’re checking out get an idea of the average cost of gas, water and electricity.
Of course, the 30 percent rule still sucks up a lot of your income. Many people prefer to spend less than that on housing, which frees up money for savings, fun spending and long-term goals. Evaluate your financial priorities to learn whether homeownership can support them.
Will Homeownership Give You Less Freedom and Mobility Than You Need?
If you want the option to move for better employment or to explore a new city, renting will give you that flexibility. Purchasing a home just to sell it a couple years later isn’t the best move for your bank account. As a result, many homeowners that may have liked to move stayed put.
Think about your plans for the next five to 10 years. If they include living in different cities, getting a new job or going back to school, now may not be the time to look at houses.
Will Homeownership Be a Bigger Responsibility Than You’d Like?
If you don’t have the time or energy to properly care for your home or don’t have the finances to outsource maintenance, renting may suit you better. The more you have, the more responsibilities you assume, so make sure you don’t bite off more than you can chew right now.
Even if you do choose to buy, renting for awhile is good practice in responsibility. You’ll have to coordinate payments and call in maintenance, but you won’t have to take care of the place yourself.
Will Homeownership Compromise Your Lifestyle?
If you are committed to a lifestyle that requires disposable income or anchors you to a community in which you cannot afford to buy, renting may be your best option. Think about your priorities when it comes to day-to-day living.
Do you like to go out with friends? Get the occasional coffee and purchase new clothes? Love your pricey gym membership? If homeownership will cut out your fun budget (and you aren’t ready to give up your spending), you should wait.
Redefining the American Dream
Owning a home can be wonderful when it allows you to meet you short- and long-term financial goals while still celebrating your most important lifestyle choices. If the answers to the above questions don’t add up to buying a home, but you still have the urge to own your abode, consider why that might be.
As Americans, it’s been drilled into our collective unconscious that renting makes you a second-class citizen, that apartment rental is a temporary state until you can “move up” in the world by buying a home, that you are not really a grownup if you rent.
Maybe it’s time to realize that pursuing your personal dreams are more sacred than the structure in which you pursue them. Your dreams are valid, whether they include a cozy apartment or a sweeping mansion.
If you have determined that renting makes more sense for you than homeownership, we hope you will embrace the freedom and flexibility that comes along with renting. In the end, renting just might be as much a part of your American Dream as homeownership.
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