Should I Rent or Buy? (The Millennial Dilemma)

About 12 years ago, we moved into our own house after living in 6 different places so I have had a fair share of mixed feelings being a tenant and a landlord.

The purpose of this post is to give you insights that will help you make a good decision in either buying renting or buying a house.

Let me first state that renting may not feel like progress, but that doesn’t mean it’s not the right move at this point in your life.

The factors you need to consider

More importantly, there’s no one-size-fits-all answer that will adequately answer the rent vs buy question for your particular situation. Some of the things that can dramatically affect the comparison include the following:

• How long you’re going to live in the home. If you’re on a temporary assignment with your work and expect to be somewhere for just a year or two, the upfront fixed costs of purchasing and selling a home such as mortgage closing costs and real estate agent commissions will typically dwarf any savings from lower mortgage payments compared to rent.
• The availability of rental properties of the type you want. If you’re single and just need a one-bedroom apartment or condominium, then you’ll typically find a lot of supply of such homes either to rent or to buy, especially in major urban markets. However, families looking for larger homes often discover that the supply of potential rentals is quite limited. That makes home ownership more of a necessity than a financial option.
• Your ability to get financing or approval. In some markets, home shoppers find that their ability to get adequate financing to afford the sort of home they want is limited. In those situations, renting can be the only way to get into a similar home. On the other hand, some would-be renters might find that their applications get denied on financial or other grounds, and that can push one back toward a purchase decision.

You shouldn’t buy a home without a plan. Period.

Beyond coming up with a plan, it’s also important to note why you’re buying in the first place.

If you’re considering a home purchase to appear successful, you’re setting yourself up for failure. If you’re shopping for a home because you feel like it’s a natural next step, you’re making a mistake.

It’s also important to look at the pros and cons of renting and buying for what they really are – not what you wish they were.

Still thinking of buying? A home provides a place to live, which can equate to stability for you and your family.

When you own a home, you are no longer at the mercy of a landlord who changes terms or, even worse, sells the property. With each mortgage payment, you also inch closer to owning the property outright.

FINAL THOUGHTS

It seems like everyone has an opinion as to whether you should rent or buy these days, but you have to decide for yourself.

Just remember, renting can make a lot of sense depending on where you are in life, what kind of lifestyle you expect to have in five or ten years, and your long-term financial goals.

“Remember, if it doesn’t portray excellence, it’s not Bricks & Tierra!”