Now is the time to...Rent?

With the recent extension and expansion of the $8,000 Federal Tax Credit, homeownership has become a real consideration for many individuals and families. But depending on your lifestyle and needs, buying a home might not be the best solution. Before taking the leap toward a long-term investment, it’s worth looking at the age-old question “Is it better to buy or to rent?”

It’s commonly said that “paying rent is like throwing money out the window,” but unless you have the time, patience, funds and expertise to profit from your home down the line, the same could be said for paying a monthly mortgage. For many reasons, renting might prove to be the better move for your situation.

Whether you are always on the go, expecting change in the near future, or still discovering what works best for you, renting offers flexibility, affordability and convenience that will cater to your active lifestyle.

In this day and age most individuals change homes, states, and even countries multiple times in their life, making a flexible living situation a perk as a renter. Or perhaps you haven’t decided what area of town you want to live in, or the type or size of home that works for you. Maybe you are a young professional willing to follow your career path wherever it leads, or you work in a job with high relocation potential. In all these scenarios renting gives you the freedom to easily change your living situation rather than having to wait until the ideal market comes along to make a sale.

When you rent, you not only have more flexibility about the timing of a move, but also in where you move. You can typically rent an apartment or home for much less than it would cost you to buy it, allowing you to find affordable housing closer to your ideal location. Many downtown condos that might otherwise be too expensive to own are much more reasonable as rentals.

In terms of money, buying a home versus renting is really a question of how you want to allocate your spending and how much risk you’re willing to endure for your investment. Many renters appreciate having more disposable income and the freedom it provides. Also renters don’t have to worry about upfront costs such as down payments, closing costs, and inspection fees. A home can be a great investment, but it certainly isn’t the only way to invest your money. If you’re looking to save money and aren’t ready to jump into the housing market, having a fixed cost and no additional risk might be the way to go.

Financial complexities aside, renters also avoid the hassle and headache of home maintenance. From the minor household tasks here and there, living in a rental, particularly an apartment or condo is void of those pesky home repairs and required renovations. Less upkeep for your house means more time to devote to what you want to do.

Choosing to rent rather than buy doesn’t have to be out of necessity. For many, renting is the ideal solution because of the flexibility, affordability, and convenience it provides. So before you take advantage of that tax credit just for the sake of it, consider how your lifestyle dictates your housing needs and financial capabilities and then decide from there.