Click to share on WhatsApp Opens in new window Is it wise to buy a house or should you continue living on rent? The age-old question of whether to buy a house or live in a rented place has always been an important part of personal finance decisions. The shift from being a renter to a house owner is a complex one, both emotionally and financially.
National Association of Realtors, apartmentlist. And how do you decide? I start with the view that, later in life, your home, as a real estate investment, grows less important. You're no longer hoping to sell at a profit in order to trade up to a bigger place. It's nice for your kids to inherit an appreciated property.
But for you and me, it's more important to nail down enough income to keep us comfortable for life.
That leads to the question of how to dispose of the proceeds when you sell a house. You can use part or all of it to buy another house or condo, with or without a mortgage. That pot of money is now tied up. You could tap it at some point in the future, by taking a home equity loan or reverse mortgage, but that probably isn't your plan.
When to pay-off your mortgage Alternatively, you can put the proceeds into a mix of bank accounts and mutual funds and tap those savings and investments for rent. This choice provides ready access to your money, without borrowing.
Here's where the sharpest of pencils comes in. Estimate your retirement budget with and without the home purchase. Where will the money come from to pay your housing expenses?
Rents will go up about 3 percent, currently but, for homeowners, so will insurance, taxes and upkeep costs. If you can pay cash for a house or condo and still have plenty of money to live on, you're a good candidate for buying.
But if homeowning strains your lifestyle — even if you conserve cash by taking a new mortgage — you're a candidate for renting.
In a very general sense, renting is cheaper than buying on the two coasts, where housing is especially expensive, and buying is cheaper than renting in the middle of the country, says Nicolas Retsinas, real estate lecturer at Harvard Business School although some markets in the country's middle are expensive, too.
Renting's rewards Becoming a renter has other attractions, even if you can afford to own. It's a way of checking out a new area if you're thinking of moving far away. It's a safety net, if you move to be closer to your kids — in case your kids decide to move.
It also makes it easy for you to travel because no one has to take care of the house while you're away. It might be a temporary move — say, to an apartment in a culturally rich city — before making a final decision on the type of lifestyle you want.
There's a landlord to handle chores and no sudden expenses, such as a new furnace or roof. For a longtime homeowner, however, the negatives are often strong.
You can't modify the space to suit your style of living. The landlord might decide to sell, forcing you to move out.Rent or Buy? Should you buy or rent? This is a question most of us will likely face in our lives, whether buying a house makes more financial sense than renting a home caninariojana.com · So, Should You Rent or Sell Your House?
Unlike high school girlfriends, real estate allows you to keep the old and the new. But deciding whether to rent out your house or sell it is a choice only caninariojana.com /should-you-sell-your-house-or-rent-it-out. But now you need to decide whether to buy or rent.
See Also: 10 Worst States for Retirement The idea of renting a house or apartment can be challenging for many longtime homeowners. Use this rent vs. buy calculator to determine if it makes more sense for you to rent or buy a home based on what you can afford.
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