{"id":741,"date":"2020-08-31T09:34:13","date_gmt":"2020-08-31T08:34:13","guid":{"rendered":"https:\/\/www.propertyunder100k.com\/blog\/?p=741"},"modified":"2020-08-31T09:35:02","modified_gmt":"2020-08-31T08:35:02","slug":"renting-vs-buying-what-to-consider","status":"publish","type":"post","link":"https:\/\/www.propertyunder100k.com\/blog\/2020\/08\/31\/renting-vs-buying-what-to-consider\/","title":{"rendered":"Renting vs Buying: What to Consider"},"content":{"rendered":"\n<p>Buying a house is the pinnacle of success\u2014or, at least it used to be. It seems as though more and more people are abandoning the popular dream of homeownership and setting their sights on financial accomplishments that are more realistically attainable, like luxury vehicles, designer watches, and worldly travels.<br><\/p>\n\n\n\n<p>That\u2019s not to say purchasing a property is entirely off the table, though. There are plenty of affordable <a href=\"https:\/\/www.propertyunder20k.com\/\">properties under 20k<\/a> that you could buy without sending yourself into debt for several decades. There are two sides to every coin, but ultimately, there\u2019s no single \u201ccorrect\u201d answer\u2014it all comes down to your personal priorities. If you\u2019re debating <a href=\"https:\/\/www.whiterocklocators.com\/blog\/renting-vs-buying-would-one-make-you-happier\">renting vs buying<\/a>, consider these points to help you decide which option suits you best.<\/p>\n\n\n\n<h2><em>What\u2019s on your time horizon?<\/em><\/h2>\n\n\n\n<p>If you\u2019re thinking about buying a house, make sure to consider your timeline in two to 10 years from now. Will you be in the same city? Have the same job? Are you ready to settle down?<br><\/p>\n\n\n\n<p>The people who like to rent are usually those that value flexibility and mobility; they don\u2019t want to be tied down to a 15- or 30-year mortgage that locks them into one location. Of course, life happens and plans can always change, but if you have to sell your home shortly after buying it in order to move to a new city or place your child in a better school district, for example, you could lose money on your initial investment.<br><\/p>\n\n\n\n<p><strong>Bottom line: <\/strong>Purchasing a home is an investment in your future, but it\u2019s a long play that will require you to live in the same place for at least two years. Just like any investment, there\u2019s risk involved should the real estate market crash and you owe more on the property than what it\u2019s worth.<\/p>\n\n\n\n<h2><em>How is your credit looking?<\/em><\/h2>\n\n\n\n<p>You\u2019ll need a positive credit history whether you\u2019re applying to rent or buy a house, but it\u2019s much more important in the case of the latter. Most of the time, homeowners rely on financing to purchase a property; it\u2019s pretty rare for someone to have a few hundred thousand sitting around in cash that they can use to complete the sale in one fell swoop.<br><\/p>\n\n\n\n<p>Lenders will look at several things when reviewing your mortgage loan application, including your age and income, but credit history is one of the most important qualifiers. Not only do you <em>need<\/em> a strong credit score to finance a house, but it\u2019s in your best interest to take the time to increase your score as high as possible in order to receive low rates.<br><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img src=\"https:\/\/www.propertyunder20k.com\/blog\/wp-content\/uploads\/2020\/08\/1.png\" alt=\"\" class=\"wp-image-818\"\/><\/figure>\n\n\n\n<p>A good number demonstrates less perceived risk, so the lender will be likelier to charge less interest on top of the principal balance\u2014saving you a significant amount of money in total borrowing costs in the long run.<br><\/p>\n\n\n\n<p><strong>Bottom line: <\/strong>If you\u2019ve missed a few bill payments in the past and are sitting on mismanaged debt, you should clean up your credit history before trying to buy a home.<\/p>\n\n\n\n<h2><em>Do you have money saved up?<\/em><\/h2>\n\n\n\n<p>One of the biggest differentiators between renters and buyers is the money they have saved up in the bank. Even with approved financing, you\u2019ll need to place a sizable down payment\u2014or, the portion of the purchase price that you pay upfront in cash\u2014to show the lender you\u2019re invested in the property and likely to repay the loan.<br><\/p>\n\n\n\n<p>Many people think they need a down payment of at least 20% of the total price in order to buy a home, but that conventional wisdom doesn\u2019t apply much today. While it\u2019s true that a 20% down payment can help you avoid private mortgage insurance and save you tens of thousands of dollars in the long run, this barrier to entry is pretty steep for first-time buyers.<br><\/p>\n\n\n\n<p>You can buy a home with anywhere between 5-15% down upfront, and there are also down payment assistance programs that can help you come up with the cash. Renting will also require a down payment, security deposit, and money on-hand for application fees, but these costs are usually cheaper than a mortgage and its affiliated costs.<br><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img src=\"https:\/\/www.propertyunder20k.com\/blog\/wp-content\/uploads\/2020\/08\/2.png\" alt=\"\" class=\"wp-image-819\"\/><\/figure>\n\n\n\n<p>What many people fail to realize, though, is that every rent payment they make likely goes toward paying off the landlord\u2019s mortgage, and the price comparison isn\u2019t that far apart. For example, if rent costs a thousand per month, a mortgage payment might be only 15% more. Rather than throwing that money down the drain on rent, those funds could be better applied to building your own wealth in home equity and increasing your net worth. You could also look into <a href=\"https:\/\/www.propertyunder20k.com\/blog\/2020\/08\/08\/everything-you-need-to-know-about-rent-to-own-homes\/\">rent-to-buy homes<\/a> in your area that can help you achieve the best of both worlds.<br><\/p>\n\n\n\n<p><strong>Bottom line: <\/strong>You\u2019ll need to budget and save up for a home, which often leads people to stick with rent that\u2019s easier to afford while keeping up with the cost of living\u2014but putting in the work can pay off tenfold if you apply the cost of rent toward a tangible asset that you eventually own over time.<\/p>\n\n\n\n<h2><em>Are you financially responsible?<\/em><\/h2>\n\n\n\n<p>When you buy a home, the hard work doesn\u2019t end once you get the keys in your hand. There are a lot of ongoing costs that you\u2019ll need to keep up with, such as property taxes and maintenance repairs. And, whereas a renter could simply call up the property manager to fix a leaking sink, that responsibility will fall on you to repair yourself\u2014unless you prefer to pay someone to do it for you.<br><\/p>\n\n\n\n<p><strong>Bottom line: <\/strong>If you don\u2019t want to deal with the hassle of property maintenance and the ongoing costs of homeownership, it might be better to rent so you know exactly how much money to budget every month.<\/p>\n\n\n\n<h2><em>Do you have competing goals?<\/em><\/h2>\n\n\n\n<p>Finally, check in with your financial goals to see if there are competing priorities. Let\u2019s say you just graduated from college; would you rather pay off your student loans or invest in the real estate market? Do you need a down payment to purchase a new vehicle?<br><\/p>\n\n\n\n<p><strong>Bottom line: <\/strong>It can be challenging to pay off debt or <a href=\"https:\/\/www.propertyunder20k.com\/blog\/2020\/07\/23\/how-homeowners-save-money\/\">save money when owning a home<\/a>, so consider your financial goals and decide what to accomplish first.<\/p>\n\n\n\n<p>By keeping these thoughts in mind as you compare renting vs buying, you\u2019ll be more likely to make the right decision for your financial future.<\/p>\n\n\n\n<h2>Samantha Rupp<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" src=\"https:\/\/www.propertyunder20k.com\/blog\/wp-content\/uploads\/2020\/08\/Samantha-Rupp-1024x1024.png\" alt=\"\" class=\"wp-image-820\" width=\"256\" height=\"256\"\/><\/figure>\n\n\n\n<p>Samantha Rupp holds a Bachelor of Science in Business Administration and is the managing editor for <a href=\"https:\/\/365businesstips.com\/\">365businesstips.com<\/a>. She lives in San Diego, California and enjoys spending time on the beach, reading up on current industry trends, and traveling.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Buying a house is the pinnacle of success\u2014or, at least it used to be. It seems as though more and more people are abandoning the popular dream of homeownership and setting their sights on financial accomplishments that are more realistically attainable, like luxury vehicles, designer watches, and worldly travels. That\u2019s not to say purchasing a … <a href=\"https:\/\/www.propertyunder100k.com\/blog\/2020\/08\/31\/renting-vs-buying-what-to-consider\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">Renting vs Buying: What to Consider<\/span><\/a><\/p>\n","protected":false},"author":11,"featured_media":743,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[149,217,233],"tags":[310],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Renting vs Buying: What to Consider - propertyunder100k.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertyunder20k.com\/blog\/2020\/08\/26\/renting-vs-buying-what-to-consider\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Renting vs Buying: What to Consider - propertyunder100k.com\" \/>\n<meta property=\"og:description\" content=\"Buying a house is the pinnacle of success\u2014or, at least it used to be. 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