Owning a house remains to be a top goal for a lot of Americans but there are people who believe that it is better to rent than to buy a house. One might not be able to understand the other since they are coming from two completely different beliefs. Though a lot of people still dream of buying and ultimately owning their own home, it can help to understand why rent is better for some people.
Forbes shares that homeownership remains to be a big part of the American story. This is still one of the long-term goals for a lot of people. Buying a house symbolizes success for some people. Finally getting the house under their name means they have made it. More than success, it is also a place for parents to raise a family.
It might feel good to come home every night to your own house and eating home-cooked meals with your family. But for some people, they choose not to buy a house. For them, it is better to rent than buy their own place. They find convenience in renting a place rather than making mortgage payments every month.
If you are trying to figure out which one is better, here are a few things to consider as you try and make a decision.
What is your lifestyle
One of the considerations why some people find it better to rent depends largely on their lifestyle. This is one of the areas you need to look into before you decide to buy a house or rent one. Your lifestyle is a big part of your everyday life that what you do can affect your living situation. If you love to travel or visit family and friends, you would be away from your house for most of the time.
If traveling includes backpacking through several destinations or going on long road trips, it might not make sense to buy a house just yet. Of course, this would be a little more challenging with the pandemic ongoing. But if traveling is a big part of your lifestyle, you might feel uneasy being tied down to one property.
Take a look at your work situation
For people who believe it is better to rent than buy a house of their own, their work situation might include a lot of travel. There are some job requirements where they might have to move around from one place to another every so often. If this is the case, buying a home and settling down might not make a lot of sense.
For one, having to move means you need to sell the house you just bought. That process might sound simple enough but selling a house and buying a new one can be a complicated and expensive process. Not to mention how you need to time it just right to avoid having to pay two mortgages at the same time. The worst-case scenario is that you end up homeless where you sell one house and fail to close on the other.
Look at your relationships
More than your lifestyle and work situation, some people feel it is better to rent than save up for a house because of their relationship status. There are some Americans who want to save up buying a house until they get married. But with the health crisis, marriage might not be on top of mind for most young Americans.
Even for those who are in a relationship, tying the knot could be far from their mind. The health crisis has impacted jobs and personal finance that wedding expenses are suddenly out of reach for some people. There are other more important expenses to focus on such as food and utilities while the pandemic is still ongoing.
Situations that can make you think twice
Now that you have an idea about the factors which can make people choose to rent over owning a house, there are some things that can make them think twice. Here are some of them to look into.
The world is going through an unprecedented health crisis. It has claimed the lives of millions of people worldwide and impacted the economy negatively. As a result, several businesses had to close down and consumers were affected as well. While there are some who are able to continue working from home, some people are on furlough, reduced shifts at work, or completely lost their jobs.
This is where owning your house can come in handy because having equity in your home is a potential source of financial assistance in trying times. Some people might find it better to rent but you can draw emergency money from an equity line on your house to help sustain your financial needs. One advantage this brings is that it can offer a low-interest rate on the amount you need since it is a secured loan using your home as collateral.
However, you also need to keep in mind that the longer you are paying for your house, your lender also holds the lien for a longer time. This means that if you encounter repayment problems along the way which forces you to stop payment on the house, you can lose your house. This is a possibility you need to remember when taking out a second mortgage on the house.
The Wall Street Journal shares that the marriage rate fell 6% in 2018 and this could be severely affected this year because of the pandemic. But the fact remains that this is still a life goal for most people in a relationship. And a big part of this is trying to raise a family and settling down normally includes plans to buy a house.
This is one of the reasons why people start to look at the market and house hunt. They look for a place they want to settle down, look at the listings, determine the average price for homes, and start saving up for the downpayment. The health crisis now might make the process a little tougher than it already is but people usually gravitate into homeownership when they start to think of settling down.
Moving into a tiny home
Retirement is inevitable for people and for those who are getting ready to make the move, they might begin to explore buying a tiny house in retirement. This is a housing situation that attracts a lot of retirees especially now that they are empty nesters. For one, it is easier to manage and maintain a small house in retirement than a big one.
It is also a lot more cost-efficient in terms of upkeep, maintenance, utilities, and even payment for taxes and insurance. It just needs to be in sync with your retirement plans of staying in one place that you love rather than moving around.
There are instances where it is better to rent than buying your own house but this is not the case for everyone. You need to carefully look at your current work situation, your lifestyle, and even your personal relationships to determine the best option for your living situation.