Have you ever asked your self if it is better to Rent or to Purchase a house? And if so, at what price point does it make more financial sense for you to buy? These and many questions keep many people on the sidelines and defer making a key investment decision early in their lives.
Renting a living space makes complete sense for many people at some point during their lives because of many reasons, which usually come in many shapes and forms, for example:
- Students and young professionals starting branching out on their own.
- People moving out of an existing relationship where they need to get back on their feet and have a landing place for a short period of time.
- People who do not have enough funds to cover the initial investment to purchase a home.
- People who do have enough funds to cover the initial investment but that have bad credit.
- People who just moved into the community and want to get a lay of the land before making a purchase commitment.
- People who are just used to renting and rather use their funds to invest or spend elsewhere.
The above-mentioned are just a brief sample of the many reasons why it makes complete sense for some people to rent a house or apartment. If you look at it from a personal and situational point of view, it does makes complete sense to rent a house or apartment.
But does it make Financial sense?
There are many subjective ways to analyze whether renting or buying a house is right for you. But if you want to make an informed and objective decision, you cannot go wrong if you get ink to paper and start putting some numbers together to make financial sense of things.
Once you compare your existing total renting costs and compare it to your tax savings achieved by becoming a home owner over a projected period of time (Say 10 to 15 years), you can get a better picture of the financial returns/losses you achieve over this period of time.
I mention losses because there is always the possibility that you can incur into a bad investment given your rent budget, purchase price of the home, future market conditions and other variables.
But if you make wise decisions from the get go, the possibilities of making a great financial investment are much better.
If you think you want to purchase a home and you want to make sure it makes financial sense to purchase, please give us a call to meet and put some numbers together with our Rent Vs Purchase analyzer.
This can be a great start for your financial freedom goals.
Saludos
PPR
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