Should You Buy a House or Rent?

Most of time, especially if you can afford it, you should buy a house. The big thing behind this is the ability to lock in at an affordable rate for 15-30 years. No fluctuating monthly payments. At the end of the loan, your payments stop completely. The only time renting is more feasible is if your monthly payments are low, or if you are planning on moving away in a few years.

However, there are a few constraints to take into consideration, which will be discussed further in this article with the overall goal of understanding when to buy and when to rent.

BUYING

The equity you build is constrained by the overall cost of homeownership.

• Insurance
• Taxes
• Utilities
• Maintenance
• Mortgage Interest

These facets offset your gain. But that’s not the point.

Buying locks you in at a fixed rate. Hopefully, an affordable one. Your home’s value is subtracted from the overall spend. Renting may get a bit of a deduction because there’s no downside for getting less return on investment, since a house will never be worth the whole price of purchasing and owning a home, but buying will still be worth it in the long run.   

RENTING

There are a few reasons renting may be the better option.  

• If you’re planning on moving in a few years.
• Super-expensive housing.
• Rent is lower than average.

If you buy a house, you’ll want to stay in it for two to three years. This makes the investment worth it. Unless you’re in an expensive city like New York City or San Francisco. In those cities, astronomical price tags and taxes make renting a bit easier on the income. And if your rent is just that low, or if you have a roommate, renting saves money.

If you want to compare how your numbers will look, we recommend Michael Bluejay’s Rent vs. Buy calculator. It breaks down a buyer’s overall costs of renting and buying, and provides a comparison for consumers to engage with.

Across the country or across the street, the team at e-Homes is your partner in the home buying process. We’re here to give you the guidance and insight throughout the home buying process.