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Renting vs. Buying
One of the most common questions pondered by first-time homebuyers before purchasing a home is this, "Would renting or buying be best for me?" While we can't answer that question for you, we do want to help you answer it for yourself. Keep reading for the Pros and Cons of each option to see which is best for you!
Renting Pros
1. No Long-Term Commitment
Most apartments or houses available for rent have short lease period of 12-24 months. This is perfect for someone who plans to move within a few years, a college student who doesn't want to live on-campus at their college, or a small family wh doesn't need much space.
2. Lower Responsibility
Often, especially in the case of apartments, some utilities, pest control, trash, and water are included in your monthly rent payment. Additionally, apartment complexes, and some houses, ask you to pay a maintenance fee that is built into your monthly payment which covers plumbing and repairs as well as lawn care so you don't have to worry about it.
3. Predictable Payment
Another benefit that comes with renting is the predictable monthly payment. Sometimes, if utilities aren't included in your rent, you will see a slight increase or decrease in utilities such as electricity and gas. However, for any utilities included in your monthly payment, there will be predictability. A full list of monthly charges will be provided to you upon touring, generally, and this price will remain for the duration of your lease. Private properties such as homes can differ, but the monthly price of renting is always predictable, either way.
Renting Cons
Buying Pros
Buying Cons
The Rule of 20
So now you know a few pros and cons for each option... What now? If you’re truly undecided or you’re trying to make a logical decision based on the numbers, consider the Rule of 20. According to this rule, multiply your annual rent (i.e., monthly rent times 12) by 20. Compare that figure to the value of homes in your area. If the purchase prices are lower, it may be more cost-effective to buy. However, if the multiplied rental value is higher, it may make more sense to keep renting.
Conclusion
Whether to rent or buy is one of the biggest financial decisions you may make. To figure out what’s right for you, you need to balance the costs that go into renting versus the commitment that goes into buying. Although the financial pros and cons of each option are important, ultimately renting or buying is a personal decision.
Where Does Lincoln Realty Come In?
Aside from providing information and resources like this article, Lincoln Realty is a team of experienced and knowledgable brokers with a heart for helping others. If you are considering renting or buying or if you need help figuring out the best option for you in your community, we would love to talk! Call our office to discuss your options today!
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