Housing Rent or Buy?

It’s late at night and you stumble up to the front door after a night of drinking with the boys. You fumble through your pockets looking for the keys to the house, but all you can find is a bunch of crumpled bills, some change, and a couple of beer bottle caps. You notice the light is on inside and you are worried that you are about to get into shit. You knock on the door and your mother opens the door and screams at you for waking up everyone by coming home at midnight. But the funny thing is that you are 32 years old, you still have a curfew and your mother is still yelling at you.

Perhaps you are looking for a new apartment because this has happened to you too many times or maybe your mother has walked in while you were having sex with your girlfriend. You have been out of school for the last 5 years and have some money saved up, but moving out never crossed you mind until your mom stopped doing your laundry and making you lunch. Now you are wondering if you should rent or buy a place to live in.

Positive Aspects of Renting a Place
The biggest reason why people rent a house before buying is the fact that they will save money in the short run. With a fixed cost for rent, no cost for any repairs of maintenance for the place, and fewer responsibilities for care, the financial risk is relatively low. Furthermore, there are extras such as swimming pools, gyms, and tennis courts that may be added features in the move. Finally, security is also good since you have neighbors near by who can see everything that is going on. This is great for people who love to travel or are away from the house quite a bit.

Negative Aspects of Renting a Place
The biggest restriction with renting a place is the fact that you do not own the place and cannot take advantage of the increase in property value. Furthermore, space, restrictions on modifying the place, and rules with pets may affect your choice. For those who are green thumbs, there are no gardens to tend. And for those who like to have gatherings, you may have to keep noise to a minimum can stop the party by midnight.

Positive Aspects of Owning a Place
Again, money is the biggest issue when owning a place. Unlike renting, you are investing into an asset when purchasing a home. Through the years, this investment can increase over the years and with a fixed loan, you can also budget your payments from your paycheck. There are also indirect benefits such as more space, a better credit rating for home owners, and tax deductions from the government. Finally buying a house allows modifying or building additions to the house and gives you much more space than an apartment.

Negative Aspects of Owning a Place
The biggest downfall is the large down payment that you have to commit when purchasing a house. Usually they require a 20% down payment, plus commitment and time on your part. Furthermore, you will be investing more money in the upkeep of the outdoors, the purchasing of new furniture and appliances, and insurance and other extras.

If you are a home owner, you will also require someone to be home if you need any repairs done and the cost of the house can decrease if the area where the house is built deteriorates. Along with the broker fees, you will see about 30% to 50% of your paycheck going to the payment of the mortgage and more money will have to be put towards paying the property tax. Other costs include painting the house every two to three years, fixing the driveway every 5 years, and fixing the roof every 10 years. When it comes to safety, vandalism is a big concern and theft is also a concern for those who travel.

There are a lot of things to consider when choosing a location whether you are buying or renting a house. Some of these things include the neighborhood, the residents that are around the area, and of course how safe the area is during the day and in the evening. Furthermore, you should look into the school and if you like the curriculum, how close it is to a local grocery store, how accessible public transportation is, and where friends can park if you have lots of people visiting. Other facilities such as police stations near by, parks and recreation centers, and hospitals should also play a role in your decision on where to move.

For those who are fine with staying in their parent’s basement, I think there is a general rule that if you get married, your wife will not enjoy it much. So if you are about to pop the question or are currently engaged, or you just hate waking the parents up at night because you lost your keys, now is as good a time as any to look for a place.

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