Rent or Buy: When Does it Make Sense to Do One or the Other?

Couple outside home for rentThe matter of renting versus buying is a question that many people face. Though it may seem like buying real estate makes more sense than renting it, is it true for all cases? Ultimately, it comes down to you, your needs, and your preference.

The Upfront Cost

If you are going to buy your own home, the first thing you need to hurdle is the upfront cost. The down payment, mortgage acquisition, mortgage insurance, and other associated fees can pile up. If you choose to rent, all you have to provide are the security deposit, the advanced rent payments, and you’re ready to move in.

The Length of Your Stay

Renting a place makes sense if you are staying for maybe five years or less, which can happen in cases when you’re studying abroad or only in the area for work reasons. If you intend to stay longer, however, it makes better economic sense to buy a place to stay. It also gives you the advantage of creating a more comfortable and personal atmosphere to live in.

Investing in Property

One of the main reasons it makes sense to buy your home instead of renting is that when you buy, your money goes into something that you own. When you rent, none of that money will ever go back to you, except the security deposit and that is still conditional. You need to have kept your unit in top shape for the security deposit to make it back into your hands.

Of course, there’s always the caveat that real estate prices can drop as quickly as they rise. If you’re looking at real estate solely from an investment standpoint, some alternatives can hold their value well. Raw land can be particularly lucrative, especially if the land is in the path of land for sale in Donnybrook, for example, have a great chance of increasing in value because of the property development there. So no matter the direction you take, always consider your needs and the feasibility of your plan to help you out.