One of the most common questions we field here at Tim DeCapua Real Estate Services concerns whether it is better to buy or rent. The question itself is quite complicated, and it is one that should be addressed only after thoughtful consideration of a number of issues that vary according to each individual. The answer is entirely dependent on unique circumstances, so understanding what considerations need to be addressed in deciding whether to buy or rent is absolutely necessary.
What Are Your Plans?
Perhaps the most significant factor in determining when to buy and when to rent relates to your intentions regarding future plans. If you plan on putting down roots and staying in the community for a decade or more, it is very likely that buying a home simply makes more sense from a cost perspective. If you are not sure whether you will be in the same place five years from now, it is almost certainly a better idea to rent. Of course, there are some locations in which it will still make more sense to rent even if you have long-term plans to stay, so this question should always be evaluated on a strictly case-by-case basis.
How Will You Use Your Income?
If you are considering buying or renting a home, you should take into account how you will use your income. The initial cost of renting is considerably less than the initial cost of buying, but if you choose to rent and fail to invest the initial savings wisely then you may have wasted a valuable investment opportunity. When conducting a cost-benefit analysis, you have to assume that the money you do not invest in buying a home will be invested elsewhere. Renting and buying both have upsides, but these upsides are unique to each individual case. Consider your specific needs in order to arrive at the best possible decision.