Rent or Buy? The Housing Dilemma in 2016
To buy or not to buy? That is the housing question. And there’s not a hard and fast answer for everyone.
There are many different factors that go into deciding whether or not buying or renting are financially advantageous moves for you.
Although conventional wisdom has often touted buying a home as a wise investment, with sure returns, those who suffered through the 2008 market crash might feel a bit disillusioned with that advice.
Below is a list of advantages for both renting and buying that may help you begin to think about which decision makes most financial sense for you.
Renting:
- Affords you more flexibility in terms of moving. This is especially helpful if you find yourself having to relocate for work. Breaking a rental contract is much easier than selling a house.
- Lower costs, as compared to the expenses that go into buying and maintaining a home, may afford you more spacious accommodations…similar to leasing vs. buying a car.
- Allows you to invest the money saved for a more diverse investment portfolio.
- Lastly but certainly not least….you’ll never be left holding the bag. Should we revisit the market lows of 2008 – and many technical indicators strongly suggest we may – the last thing you want is a 30 year note on an overinflated beach front bungalow.
Buying
- Depending on where and when you buy your home, you housing investment could greatly appreciate, helping to grow your wealth.
- While housing prices are currently affordable, they are rising. Buying a house now could pay off should the housing markets bounce back. However, given the instability I mentioned above, be certain before taking the plunge that you’ll be able to carry it through bad times as well.
- Rental rates are on the rise, and not likely to drop anytime soon. Given the low mortgage rates, buying now might make more sense as a long term investment.
- Provides stability, security, and a place to call your own. If you’re planning on living in an area for a while, one that has a healthy and thriving housing market, it might make sense….because there’s nothing quite like owning “home sweet home”.