Deciding To Rent Or Buy A Home

Your lifestyle is just as important as your money when deciding what is the best for you.

It might seem like you believe buying or renting your next house is a financial decision. Most likely, you are right. But, homeownership might not be the right timing or responsibility for you. Let's begin with the numbers.

Follow The Money

Renting or buying will depend on the housing market. It is important to understand your financial situation in the housing market. Check out median home prices and rent in your local area.

Calculating The Math

There are four steps that can help you decide whether buying or renting is better:

• Calculate the monthly cost of owning a home

• Calculate the tax benefits of homeownership

• Add the tax benefits to your cost of ownership and you'll get the "after-tax" cost.

• Compare the market rent after-tax cost of a comparable property

These calculations will allow you to calculate how long it would take for rent to pay off your home. This tipping point is known as the breakeven. This is when rent-related expenses do not exceed the cost of buying.

In This Instance, Renting Is Possible

Renting or buying is not just a financial decision. It's also a lifestyle choice. A multi-unit building can encourage socialization and help children learn to share.

Renting is a great option to reduce the stress and costs associated with maintaining your home. You can also move quickly, provided you keep your lease in place if there is a job opening.

Although you do not receive the tax benefits associated with homeownership, any money you spend on a downpayment, mortgage, renovations, or taxes could be used for other ventures.

Renting in your local area allows you to get to know the area before you decide to buy long-term property.