To Rent or Not to Rent?

Are you planning a move this year or next? If you are, we’re here to help. One of the most common questions we get from people making this transition is: “Should I rent or should I buy?”

Here are two questions that will help you set priorities and make an informed decision as you investigate your options.

How long will you be in the area?

If you don’t plan to be in the area for longer than three years, it’s often more desirable to rent than to buy. When you rent, it is easy to be flexible and step away from your lease in order to travel or make another move. Attempting to sell a home is often a much more difficult process. If you decide to rent, try to find a place that is financially wise. Spending extra for things like a racquetball court, skylight or hot tub—even when you know you will only be renting temporarily—may not be financially prudent. Keep an eye toward the future and use your time as a renter to pay off debt and save for the future rather than spending that money on fancy amenities. 

Are you working your way out of a lot of debt?

Are you still in the early stages of paying down some major debt? Are you renting in order to have fixed and predictable expenses so you can tackle that debt and begin saving? Good plan. Renting can be a helpful (temporary) stop along the road, but it is not a destination. Although renting can save you money on things like repairs, homeowners insurance, and property taxes, you will have nothing in your possession for all of those payments at the end of your lease. If you decide to rent in order to reduce debt—make a plan, stick to it, and enjoy watching your debt fall away and your savings grow.

If you plan to remain in the area for longer than three years and your finances are in order, it makes the most sense to purchase a home. Although there may be more unexpected expenses, you can work on your emergency fund and set aside money to cover those expenses in your monthly budget. Then, you will be spending money on something tangible that you will eventually own.  

We hope this has helped you with your decision, but remember—we are here for you! Talk with us about whether renting or buying is the right choice for your next move. See how we can help today!

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