The question of whether to rent or buy has plagued potential homeowners for decades. On the one hand, renting gives you the flexibility to move often, and your landlord handles maintenance. On the other, homeownership allows you to build equity while freely transforming a house or condo into your ideal living space.
You’ll have many factors to consider when asking if you should rent or buy a house. We’ll help you sort through key considerations affecting the decision to rent or buy a house.
Should I rent or buy a house?
If you do a financial health check and find everything is in order, it might be time to buy an actual house. Having the following in place means buying a home could be a good decision for you and your family:
- You have three to six months of living expenses saved
- You have enough money set aside for a down payment of 10 to 20 percent
- Your job is relatively secure, or you could easily land a job that pays as well or better
- Your mortgage payment, HOA fees, homeowners insurance, PMI, and property taxes add up to a quarter or less of your take-home pay
Planning for job loss, illness and other catastrophic events will help ensure that you can afford your new home while enjoying life and saving for the future.
Other Rent or Buy Considerations
Giving your money to a landlord can feel like throwing it away. After all, you’re not building equity in a home that’s all yours. And you can’t make major changes to your home without running them past your landlord. But renting can be beneficial under these circumstances:
- You might need to move in the next few years
- You aren’t able to keep up with a lawn or major home repairs
- You don’t have enough saved for the down payment and other expenses
- You owe a lot in student loans or haven’t paid off consumer debt
Taking all these factors into consideration is a must.
Look Ahead to Decide if You Should Rent or Buy
Having a big-picture view of things will help you make an informed decision. While the financial considerations are essential, it’s also important to answer these questions:
- What is the cost of renting vs buying in your area?
- Do you like the area enough to put down roots there?
- Will your job require you to relocate in a few years?
- Do you want to do any long-term traveling in the next few years that will require you to leave your home for months at a time?
If you have younger kids, area schools will play a major part in your decision—not just now, but for the next decade or so. If imagining yourself and your family in the same place for many years to come leaves you with a good feeling and the numbers add up, buying there makes sense.
Find out if You Should Rent or Buy with Landmark
The rent vs. buy calculator from Landmark National Bank takes some of the guesswork out of the homeownership question. Our friendly mortgage lenders can also help you determine whether the time is right to buy. Visit a mortgage lender at a Landmark National Bank branch location near you today!