Rent or Buy?
The topic of buying or renting a home is hot according to Google Trends which compares popular search terms that come across Google search. The chart below illustrates the current trends and forecast for particular search terms around buying and/or renting.
There is no doubt determining whether you should rent or buy can be an overwhelming task. Just do a search on Google and you will find 852,000,000 (that’s right, MILLION!) results for the search term: “rent or buy”.
The choice between buying a home and renting one is among the biggest financial decisions that many adults make. Rather than you having to sift through countless, well 852,000,000 searches, I am here to help you simplify the task in determining if it makes more sense to purchase or rent a home.
A recent article in the New York Times provided an online rent or own calculator that is the best I’ve seen. This calculator enables prospective buyers and renters to analyze their own decision. For example, for a typical person considering the purchase of a $500,000 house who expects to live in that home for seven years, it might make sense to rent if a similar place is available for $1,956 a month or less.
However, thanks to low interest rates and housing booms in the Dallas-Fort Worth area the wisdom of buying versus renting depends heavily on each person’s financial situation, plans and preferences. And the cliché about all real estate being local holds; each North Texas neighborhood can have its own unique dynamics in the for-sale and for-rent housing sectors that must be considered.
That in mind, let me recommend you use the rent or own calculator provided by the New York Times. There are likely some figures you will want to get from me as a mortgage loan officer to get an accurate result. Feel free to contact me and I will be glad to get you those figures.
In addition, following are five questions you need to ask yourself before buying a home, that I obtained from Neil Irwin in TheUpshot (New York Times):
- How much is permanence worth to you?
- How confident are you that you will want to stay?
- How confident are you about your future income?
- Can you force yourself to save?
- Can you accept that the future is unknowable?
Sample screenshot of calculator: