Should you be Renting or Buying? 5 Factors to Help You Decide

While American culture has shifted, evolved, and changed dozens of times throughout the decades, home ownership has always been held as a sign of success. Owning a home is central to the “American Dream,” and many people dream of the time when they’ll have the freedom, flexibility, and financial potential of owning their own home.

That’s not to say, however, that home ownership is right for all people, at all times. In some cases, it’s smarter to rent than it is to buy. But what’s the right decision for you? Today, we’re going to break down five critical markers that will help you decide. Read on.

Is Renting or Buying Right for You?

Whether you’re a single adult or part of an established family, these five factors can help you decide whether you should keep renting or take the leap and settle down:

1. You’re not planning on moving within the next 5-7 years

If you’re still testing the waters and trying to decide where you want to be, buying might not be the best option. According to LearnVest, it takes approximately five years to earn money on a home, so if you’re planning on moving before that happens,  you might want to think twice. Otherwise, you may end up losing money in the process, especially when you consider the closing costs and Realtor’s fees you’ll pay during the sale.

2. Your rental is a great deal

If you’re getting a killer deal on your rent, you might want to stay in your current place for a while. Renting is typically less expensive when viewed on a month-to-month basis, and you may be living in a high-demand neighborhood you couldn’t otherwise afford to purchase a home in.

3. Buying would place you further from work, school, or entertainment

If buying a home will increase your commute to anything you do regularly, you might want to hold out until something closer comes along. The money you’ll spend on gas and transportation over the course of a few years may make it cheaper to rent. What’s more, commuting can have a negative impact on your mental health and wellbeing, boosting your stress levels and eating up your leisure time.

4. You don’t want to do home maintenance

The beautiful thing about being a renter is that you’re not responsible for doing things like cleaning gutters, fixing broken appliances, and replacing the roof when it starts to leak. As a homeowner, these duties are all yours, so don’t take the leap if you’re not ready – in terms of time or money – for these obligations.

5. You’ve just moved to a new location

If you’ve recently changed cities or states for work, don’t buy a home until you’ve gotten to know the area better – generally within 6-12 months. Waiting will allow you to decide where you want to be, which amenities are important to you, and how you’d like to live.

Renting vs. Buying

While the decision between renting and buying isn’t always easy, it’s also deeply personal. If you’re new to an area, happy with your minimal, renter’s responsibilities, or scoring a great deal on a high-demand apartment, you might want to stay put. If you’re looking for the next step, however, buying can be a great move. No matter what you choose to do, it’s always smart to evaluate your personal station and preferences before you decide.