June 29, 2018 Chris Jolma

To Buy Or Rent: Understanding The Costs

If you are tired of living in a cramped apartment, chances are you are looking to buy or rent a lovely home. When comparing costs which strategy would work for you? Do have the credit or financial means to buy a house? Is there enough down payment money available? It is essential to look at all of the aspects before making such a significant decision.

Buying A House

When buying a house, you need to sit down and look over your finances. In understanding the costs, you not only need to know how much house you can afford but also how much can you pay for the upkeep. Homeowners spend between 1% and 4% of the value of their home on maintenance and repairs. All this means is that you can borrow up to the equity of your home to either remodel or just make improvements as needed. The question is, are you committed to that? If so, then home ownership is right for you. As long as you can afford all the necessary expenses that come with the territory, such as property taxes, insurance, school dues, and homeowner association dues, you will be fine. Just know that owning a home is a huge responsibility and can be overwhelming. Not all repairs are covered by insurance or are difficult to claim (for example, flooding or construction damage), and sometimes you need to make renovations to keep your home value up (such as keeping your roof in good shape). These are extra costs that you have to take into account. You are in control and responsible for all expenses concerning your purchase. Alternatively, you can also see if buying smaller properties could be beneficial, such as a condo.

Renting A Home

Renting a home is not a wrong solution if you just want to get the feel of what it is like to have more privacy than what an apartment offers. You still will not have to pay for any maintenance or repairs because there is a landlord. The only thing you might be responsible for if it is not included in the rent is paying to keep the grass cut. Living in a rented house will give you an idea of whether or not you are ready for homeownership. If you can’t afford any repairs or maintenance, you may not be prepared to pursue owning a home of your own just yet. You can gauge this by asking your landlord how much repairs might have cost them, and then compare to see if you could have fixed the issues by yourself on top of a mortgage.

To buy or to rent is a critical decision. Make sure you have an understanding of how much money you are putting into it. Buying or renting a home can be a wise choice if you take time to investigate what will work for you. It is always good to know what you’re getting into.

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