Buying vs. renting [Infographic]
Everyone's living situation is different. Some individuals prefer the flexibility of renting and have no problem with always living in new places, while others might seek out a more stable living situation that lends itself to raising a family.
While personal preference can influence certain desires when it comes to where you're living, your current life situation will also play a part and influence your decision to either buy a house or continue to rent.
When and why you should rent
Renting is likely your first choice if you need flexibility in your life, particularly in the short term. If you aren't sure what your plans are over the next six months to two years, you may want to lean toward renting. Such uncertainty is not uncommon if you're a recent college graduate and don't plan to stay at your current job for the long term but still want to enjoy the perks of living on your own or with roommates.
Another factor in your decision to rent may be your income. If you have limited income or are generally unsure how you feel about your current job, renting is the right living choice. Leases typically are good for one year, and this allows you to still plan to have a roof over your head but not commit to anything in the long term.
Finally, renting will help you save money if you don't want to spend anything on maintenance or repair costs, as the landlord will handle all of these expenses.
When to buy
If you have a job you're comfortable in and know you'll be in the same city or town for at least five years, consider buying a home. Doing so will help you start to settle down, a mindset that is especially useful if you're in the early stages of raising a family.
You'll ideally want to look for a home that is two and a half times your annual income while also saving for a recommended 20 percent down payment. While renting can provide some stability, you may discover that, depending on where you live, it makes more sense financially to buy a home instead of renting. It's not unusual for monthly rent payments to be higher than a mortgage payment.
If you're looking for one final reason to buy, consider how you'll build equity that can come in handy in the future.
When it comes to buying or renting, there are certain conditions you'll have to consider, such as income levels and if you plan to stay in the same location for an extended period of time.
The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.