Home Ownership has been ever since, the ultimate American Dream. Aside from having the control over your own home and it being a long term investment, owning a house gives you the pride of ownership, sense of stability and belongingness in a community. However, it’s not for everyone.
There’s actually no universal or best choice between the two – it all depends on your financial situation, goals and preferred style of living. Both renting and buying have their own pros and cons. Either way, it’s a major decision that you have to make with your head, and not your heart.
If you’re trying to decide whether you should rent or buy a home, here’s a previous blog entry about the reasons why renting is better for you or continue reading to answer the 4 questions you need to ask yourself buying one.
1. Can you afford the costs of home ownership?
Investing in a house costs a lot of money. Sure, you have the down payment ready but don’t forget the lawyer fees, mortgage insurance, new furniture, etc. And aside from the fixed house costs, there are also so many unpredictable expenses that come and go month after month. That’s why you also have to make sure that you have enough money on your emergency fund. Write down the list of ALL costs you’ll have to pay and ask yourself again – can you really afford it?
2. How long can you stay in that place?
Moving homes is a lot more complicated when you’re a homeowner, reselling is not easy either. If you have plans to relocate in the near future or travel around the world, then home ownership may not be your best option for now. Think about your future plans – your job, the community you’re planning to live in, your family… etc., before deciding on whether you can really stay in that house for an extended period of time.
3. Will you have time to maintain your property?
With renting, you are paying for the luxury of not having to worry about maintenance or repair. When it’s your own home, you have to do all the “dirty work” or pay for a professional to take care of any maintenance or repairs.
4. Are you aware of the future’s uncertainties?
You should know that the future is unknown and things could get messy in the future. Due to economic factors, prices can soar high and reselling your home in the future could mean losing money instead of earning from it – not the kind of investment that you were hoping for, right?
So ask yourself these questions to know if you’re financially, mentally and emotionally ready to invest in your own home.