Rent or Buy?
Welcome to the tortured, modern American real estate soliloquy: to buy or not to buy? For millions of urban and suburban dwellers alike, that is the question. And it's a tough one: As home prices keep nudging higher, so do rents, which don't provide any equity.
You've calculated your assets and earnings. You've nailed down your lifestyle costs to the penny. You've zeroed in on the area where you want to put down roots. And you're totally down with the whole
American Dream of home ownership, tired of flushing away buckets of cash each month with nothing to show for it. But can you afford this? Saving up for that down payment and monthly mortgage can be an intimidating feat, especially for all those first-time buyers burdened with student loan debt.
That's why renters across the country look around and wonder: Does it makes more financial sense, at this point in time, to rent rather than buy a home?
We learned that homeownership isn't always the best bet. It all depends on how much money you're making compared to your expenses, what your plans and financial goals are, and, most importantly, where you plan to buy.
'Homeownership is the opportunity to build wealth. It also helps people be more stable.' 'If there's a recession and you lose your job for a year, then people can take out a home equity loan and get through the hard times.' But the entry costs can be prohibitive.
Our calculations also don't factor in the costs of down payments or annual maintenance. And they don't include home appreciation, which makes the investment worth more as the years go by. Rule of thumb: You should plan on staying in your home for at least five to seven years, to build enough equity to cover sales costs.
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