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Renting or Buying: How to Decide

When moving into your first home, you have to decide whether you are going to rent somewhere or try to purchase a property of your own. Some people will say that renting is the right thing to do as it means you can move into your new home a lot sooner, especially if you are not going to be in a financial position to buy for a long time. That is the case for a lot of people these days and it may feel like renting is the only way that they will ever get a place of their own.

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On the other side of the argument, some people say that renting is just wasting money. With rents at the high levels that they currently are, it will take you a lot longer to save up the large deposit you will need to get a mortgage. These people will tell you that you should carry on living with family or friends, where you won’t have as many outgoings, so you can save up and buy your own property a lot quicker.

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So, who should you be listening to? The truth is, that there are benefits to both renting and buying. You need to make the decision for yourself, but there are a few things that can help you choose what is right for you.

The Housing Market

In a lot of places, it is cheaper to buy than it is to rent, if you stay there for an extended period. That doesn’t mean that’s a general rule though, the markets differ from city to city and some places it will actually be cheaper to rent. The best thing to do is to contact a real estate agent in your local area and compare your options for rental and purchase, you might be surprised at what you find.

There are also rent-or-buy calculators that can help you determine which option is more financially viable.  

Your Lifestyle

Your current situation and lifestyle is also a big factor in deciding between renting or purchasing. If you move a lot for work, then renting might be a better choice for you, as it is easier to cut ties. Purchasing a home in an area ties you to it, so unless you are sure that you want to stay living there for a significant period of time, you might find yourself in trouble. If you were to buy a house and then move, you could rent it out but this is a lot of work to take on. If you buy and then sell shortly after, you will lose out on all of the administrative costs of buying and selling a home.

Your Finances

The cost of a house doesn’t stop when you have purchased it. Unlike rental properties, you will have to pay all of the maintenance costs while you are living there. This can be quite expensive and you need to ask yourself whether this is what you want to spend your money on. If you have debts, for example, you may want to use your extra income for this instead.

When choosing whether to rent or buy, people are going to give you a lot of conflicting advice. The best thing to do is to look at your own personal situation and decide which works for you.