Home ownership is an excellent goal to have. But if the purchase is poorly timed, the experience can often become a disappointing financial drain instead of an investment success. There can be many situations in which renting a home may be a better choice than buying. If you are considering the purchase of a home but wondering if the time is really right for you to make such a large financial decision, taking time to ask yourself the following questions can help you decide whether which choice is the smartest option at this particular point in life.
Do you plan to stay in the same area for at least five years?
Costs associated with a home purchase process, such as inspection fees, title insurance, closing and moving costs add up to a significant outlay of cash for most home buyers. Since it can take as long as five years to recoup this costs in many areas of the country, depending on local real estate conditions, buyers may not be able to break even or make even a small profit if they have to resell the home during that time frame. To avoid this problem, take time to look at your future and make sure that there are no foreseeable plans to relocate.
Can you afford all the costs involved in buying and owning a home?
In addition to the costs associated with buying a home mentioned above, home buyers must also be sure they can afford the recurring costs of home ownership. These costs are best defined as periodic ones that continue throughout the period of home ownership. Some of the most common recurring costs of home ownership include:
- real estate taxes
- home maintenance, repairs, renovations
- home insurance
- utilities and services, such as electric, water, sewer, gas, trash, internet, and cable
In order to get a true picture of the cost of owning a home and whether you can easily afford them on your current income, buyers should always consider all the costs of home ownership, including any recurring costs, to make sure the home will be affordable to own.
Are you ready to commit to maintaining a home?
Another factor to consider before deciding whether to buy or rent is whether you are ready to commit to the maintenance associated with home ownership. From mowing the lawn and dealing with clogged toilets to paying for furnace replacements and roof repairs, home owners are responsible for keeping their home in good condition. So before making your final decision whether to rent or buy, make sure that you have the desire, time, and financial resources to maintain a home.
For even more insight on buying versus renting, speak with a reputable real estate professional, such as at Foxfire Realty, Inc.