It seems like an age-old question, “should I buy or rent my home?” In fact, this question was much easier to answer in the past. As the world is becoming more and more globalized, the question of renting or buying is becoming more and more difficult to answer.
Instead of home ownership remaining a symbol of true adulthood and financial security, it is now only an option among many acceptable adult practices. As you decide whether to own or rent, there are many questions you should ask yourself.
This decision is extremely personal, and these questions will help you make the best decision for your life, your goals, and your budget.
How Mobile Do You Want to Be?
In the increasingly globalized world, one of the most important questions you should ask yourself as you decide whether to rent or buy is how mobile you want to be.
If you feel your life would be best lived by settling down with a home that is truly yours, then buying may be the best option for you. But if you would rather continue exploring the world with the freedom to move around as you wish, then renting may be the better option.
An advantage of renting, then, is mobility, while ownership keeps you a bit more grounded.
How Flexible Is Your Budget?
The next question you should ask is budget related, as you make your decision, your income can give you a good idea as to whether buying a home is a viable option. Before you make any big financial decisions, you should always examine your budget.
Once you have taken the time to truly look at your budget and see where you stand, you will be better prepared to make this difficult decision. Renting is generally a cheaper option (though it is less stable and more temporary), while buying a home is usually more expensive (but results in a place that is truly your own).
Does Home Ownership Make You Feel Secure?
One of the biggest benefits of home ownership is the security it brings to homeowners, but for some individuals, security is not always something they are looking for.
As you decide whether to buy or rent your home, you should consider how important security is to your goals.
Do You Want to Customize?
Another great benefit to home ownership is the option of customization. Often in rented spaces, the kind of customization you can accomplish is limited, in your own home however, you can alter your location to look exactly the way you want it to!
If customization and really making your space your own is important to you, then you may want to consider buying over renting.
Will Your Home Appreciate?
For some people, home ownership is an investment, and while this can sometimes work out, homes aren’t guaranteed to appreciate. Before you purchase your home, you should consider its potential to appreciate or depreciate in value.
According to Forbes, homes have appreciated 4.5 % per year on average since 1975 which makes them a good investment, though not as good as stocks which have (in the long-term) appreciated at around 9.8% per year.
If your home appreciates, it can be a huge benefit to you if you decide to sell, but you can’t count on this appreciation.
Are You Worried About Inflation?
Inflation can be a huge disadvantage if you are renting, but if you purchased your home on a fixed rate mortgage (or in cash), inflation can actually work out to your benefit. Understanding inflation can also help you to make the best decision as you consider settling down.
Making the Decision
Deciding whether to buy or rent is a difficult decision to make, and although answering these questions will make the decision a bit easier, it will still be difficult. This site has information that may help you with making the decision.
When it comes down to it, the decision to buy or rent is very individual. It depends on your personal circumstances and the goals you have for your life. If you are interested in the stability of a home base, ownership may be right for you, but if you want a more flexible lifestyle, renting could be the better option.