Owning vs. renting: which is right for you?

Owning a home has always been considered part of the American Dream, but with the economic hardships the country is going through, it seems like it’s harder than ever before to save up to buy a house. In fact, saving up for anything is difficult and it makes you wonder if it would make more sense to rent instead. When deciding in owning vs. renting, there are basic financial factors to take into account, but there are also emotional and lifestyle specifics to think about too.

Set aside time for some much needed financial soul searching and economic sleuthing: go through your finances; determine how much you can comfortably spend a month on housing. From there you can look in your favorite area at how much apartments and homes cost. Keep in mind that if you’re considering home ownership, there are a lot more costs involved such as: upkeep, taxes, and insurance bills, and for that reason you should be prepared to spend around 28% of your gross monthly income. If it were just about money then taking sides in owning vs. renting would be easy, but there’s more to consider.

We all think that buying a home is the first step to “settling down”, but the fact is your life might still be in transition after moving in. For this reason, you should think about where you see yourself being in the next few years. If you know you will be earning more in a few years you may think about taking the plunge into home ownership. However, if you see yourself living in a different city then you may want to focus on renting since you can sign a monthly or yearly lease that only commits you in the short term.

Finally, consider the advantages and disadvantages of owning vs. renting; here are the main points to consider:

Solving the owning vs. renting puzzle depends on several factors; a careful consideration of your finances, the real estate market, and also your emotional concerns. You have to ask yourself if you would thrive with the responsibility of home ownership, or feel burdened by the significant financial obligation. You also have to ask yourself if you consider renting to be throwing your money away or a shrewd way to keep your cost of living expenses down. In the end, there is no completely right or wrong answer only what the right decision is for you.