For the first time home buyer, how do you know when to take the plunge and stop renting your home, and start looking to buy a home…
What is the advantage to buying? Or should I keep renting?
Buying isn’t for everyone and the choice to buy should not be taken lightly. It’s a big commitment and you need to understand all the aspects of buying and owning before taking that leap. That being said, I believe there are huge upsides to investing in the right piece of property. This will likely be your largest purchase of your life and you should invest the appropriate amount of time to research the process, as well as get advice from experts you trust regarding types of homes, the market, financing as well as calculate all fixed and variable costs. The primary reason for purchasing a property is to invest in an asset that will appreciate in value over time, coupled with you paying down your mortgage in a forced savings program (of sorts). As opposed to paying off someone else’s mortgage for them. The other big benefit is that feeling of ownership and the ability to make changes to the property to make it your own unique space and if done right, add even more value.
There is a financial and lifestyle argument to be made for renting as well. If you feel that you are not prepared to take the risk and think that property values will decrease over the time you will own this property, or you are not prepared to take on the responsibility of owning a property, and like the safety of calling the landlord when there is an issue, it’s probably the wrong time for you to buy. From a strictly financial stance, if you feel you can save a significant amount by renting and are disciplined enough to take the difference and invest it successfully at a rate higher than the market increase in property value, then it’s a smart move for you to rent. I will say, I have never met someone with this discipline and skill, but I’m sure there is someone out there….. hello?
Here are some great rent vs. buy calculators to help you determine if you should rent or buy: