Should You Buy or Rent Your First Home?

YOUR FIRST HOME: To Rent on T Buy? Should you Or should pour your you save savings into buying money by renting your own instead? place? There are factors that will affect your eventual decision, and here's some food for thought: ON OPPORTUNITY COST The dilemma of buying versus renting comes down to the problem of opportunity cost, or what benefits you would be giving up if you picked one choice over the other. Consider your own unique circumstances, and the impact of either option on your future financial prospects. PRICE Buy if... Rent if.. the property costs no more than 2.5 times your salary and if you can keep up with the annual property tax. the monthly fees are expected to stay low over a long period of time, and in the case of condos - if you can keep up with the association dues/fees. YOUR BUDGET Rent if... the cost of buying wipes out all your savings on the house alone. Buy if... you current income can cover a mortgage down payment of at least 20%. 9 YOUR NET WORTH Buy if... Rent if... you' have a robust investment portfolio, or supplementary income to complement your first home purchase. you have fewer opportunities for additional income outside of your day job. OWNERSHIP FEES Rent if... Buy if... you' have enough cash to cover costs like property taxes, realtor transaction fees, and new furnishings. you would rather hand over the costs of regular upkeep to a landlord or property manager. TIMING IS EVERYTHING Conventional wisdom dictates that the sooner you can own a home, the better. In some situations, however, renting makes more financial sense in the long term. The money you saved from renting instead of buying can be used to grow your investments or set up a new income stream. LENGTH OF STAY Rent if... Buy if.. you plan to build a long-term home in the area with your family. you intend to live in the same place for just four to five years at most. HOME IMPROVEMENT Buy if.. Rent if... you want full control over your home's looks, interiors, and comfort levels. This you're more interested in a living space with just the basic necessities while you're at work. is your option if you want to design your own space to your liking. DUTIES AND RESPONSIBILITIES Rent if... Buy if... you see yourself as a proactive homeowner willing to learn basic repairs. This is anything from plumbing to electrical repairs. you are inexperienced in absorbing the financial risks of homeownership. NEIGHBORHOOD Buy if... Rent if... you are well-versed in the area you're planning to occupy. Consider this option if living outside the city center won't be you are a newcomer unfamiliar with the surrounding streets and towns, or prefer living in the center of the city. inconvenient. CITY VS. COUNTRY LIVING Property values vary depending on whether you're living in an urban or rural setting. III Expect both rent and sale prices to skyrocket in the metropolis, especially a high-demand location near a major business district. ENVIRONMENT Buy if... you'value your privacy and personal Rent if.. you don't mind the hustle and bustle of sharing a building with other tenants. comfort above other considerations. Can't get enough financial advice? MoneyMax.ph can help you find great bargains on car insurance in the Philippines! Head on over to the blog to learn more about helping your finances along. MoneyMax.ph We compare, you save Sources: http://www.businessinsider.com/buy-or-rent-a-home-flowchart-2014-7 http://twocents. lifehacker.com/should-i-buy-a-home-or-just-keep-renting-1699277766 http://www.bankrate.com/finance/mortgages/should-you-rent-or-buy-a-house-1.aspx http://www.forbes.com/sites/billconerly/2013/11/11/should-you-buy-a-house-or-rent-the-economics-of-homeownership/ http://www.investopedia.com/articles/05/011205.asp http://money.usnews.com/money/personal-finance/articles/2014/10/10/should-you-rent-or-buy-7-questions-to-help-you-decide http://www.nolo.com/legal-encyclopedia/buying-house-twenties-are-you-29838.html http://business.time.com/2012/12/03/is-it-better-to-rent-or-to-buy/ http://www.cnbc.com/id/102541200 http://www.cnb.com/id/102077898