How to Know If You Should Keep Renting Instead of Buying
One question I heard frequently throughout my 20s was, "When are you going to buy a house?" Some believed I was already missing out on the benefits of homeownership while others thought with my career constantly taking me to new cities, I was better off renting forever.
Many people grapple with the decision of whether to buy or rent a home. While there are pros and cons to each and the decision is ultimately personal, here are some signs you should keep renting.
1. No Savings: Sometimes it's tempting when you hear of low down payment options for buying a home. But if you don't have an emergency fund yet or if purchasing a home would drain all of your savings, you probably aren't ready. Homeownership comes with expenses -- you never know when a hot water heater will need replacing -- so you want to make sure you have money set aside for%VIRTUAL-pullquote-If the thought of buying a home makes you so nervous that you are making yourself sick or having trouble sleeping, you need to explore the reasons before you move forward.% home repairs on top of the usual living expenses.
2. Uncertain Future: Signing a mortgage means you are agreeing to pay money every month to own that home. If you have a stable job that you love, this can be great. But if you are unsure whether you will have your job for the next few years, you may want to wait. Even if you've just gotten a new job and you are very excited, it may be wise to get a feel for the company before you jump into homeownership. You'll want to know whether the company is hiring or laying people off and what its financial outlook is to determine your own job security.
I kept renting throughout my 20s because I wasn't sure where I was going to be living. My career had me moving around the country with very little notice. I stayed in one state for nine months and another for only six months. I wanted to be able to accept new assignments and opportunities that came my way without worrying about selling a home. If you aren't certain where you will be in a few years, or perhaps even months, you might want to keep renting for now.
3. No Research: Buying a home is a big decision. You'll want to learn what you can about the local housing market, including the pricing trends, the school district and the property taxes. Another thing to consider is how well you know the home itself. Sure, that roof looks good, but an expert may tell you it needs to be replaced soon. That's not the kind of surprise you want after you've spent a lot on a down payment.
Don't rush into homeownership without doing your research. Think about how much you regret that impulse buy at the mall and multiply it by ... a lot!
4. Fear: Yes, you have to face your fears. But if the thought of buying a home makes you so nervous that you are making yourself sick or having trouble sleeping, you need to explore the reasons before you move forward. Perhaps you aren't sure this is the right time or the right house. Maybe you don't want to take on a long-term loan like a mortgage or you worry about being tied to one location. Before you take on a mortgage, it might be best to determine what is truly bothering you.