Owning a home has traditionally been part of the American dream. But homeownership may no longer be the most desirable housing option, or even a viable option, for many people.
For the majority of those who don’t own property, that will mean renting.
HOW MUCH SHOULD YOU SPEND WHEN BUYING A HOME?
The benefits of homeownership are well-known. It’s an opportunity to build equity over time. Real estate almost always increases in value. And homeowners can do whatever they like with their property, limited only by their budget and local zoning laws or HOA rules.
However, renting can have financial advantages, too. In a seller’s market, someone who does intend to buy a home may be able to see significant savings if they wait. It can also take time to save up enough money for a down payment to buy.
Anyone expecting to move to a new city within a few years may also find it’s cheaper to rent for now and buy later. Websites like Nerdwallet.com offer calculators to determine the better option, based on costs and time.
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IS A HOMEOWNERS ASSOCIATION RIGHT FOR YOU?
For anyone who moves frequently, the flexibility of renting may always prove to be the more cost-efficient option.
Renting also means that you won’t be responsible for maintenance or its costs, which can be a plus for people who aren’t DIY-inclined or who’ve grown less nimble with age.
The downside is that rent payments will likely go up over time. And a landlord could potentially sell the property out from under you — especially if it’s a seller’s market.
Ultimately, deciding when you rent will come down to your individual circumstances and longterm plans and goals.