In my opinion, buying a house makes sense if you do the math, and figure out what the ACTUAL cost of ownership is, and are smart about your purchase. I think buying a big house is a waste of money if you do not have the money? To be “house” poor means most of your money goes into your house one way or the other. If you live in a home it could be a liability but, if you use the equity to invest in other ventures it became an asset in addition the comfort of living in your own home.
HGTV and such don’t help, but most people fall “in love” with some aspect of a home, be it countertop, or garage, or whatever. Then they overpay, and spend the rest of their lives catching up. It’s a cascading effect. Find me someone with a big garage……that ISN’T full. Good luck.
HGTV and such don’t help, but most people fall “in love” with some aspect of a home, be it countertop, or garage, or whatever. Then they overpay, and spend the rest of their lives catching up. It’s a cascading effect. Find me someone with a big garage……that ISN’T full. Good luck.
But there are convincing arguments on both sides of the buy-versus-rent debate, and whichever you gravitate toward should ultimately depend on your personal circumstance rather than the views and decisions of your peers.. This answer is also highly subject to your own market. Real estate is local. Very local. There is no such thing as “the housing market”. There is YOUR housing market. If you’re debating between rent and buy, consider the following rules of thumb when making your decision:
When to Rent
• You aren’t ready to settle down and don’t know what your long-term plans are (e.g. you might go back to school, take a job promotion in another country, your job situation isn’t stable, etc.).
• You can’t afford the monthly carrying costs of homeownership. Renting is more affordable and makes more sense in the short-term.
• You’re carrying high-interest debt. Focus on pay VISA off before buying a home. It makes little sense to borrow money for a mortgage when you’re paying 19% interest on your credit card.
• You aren’t ready to settle down and don’t know what your long-term plans are (e.g. you might go back to school, take a job promotion in another country, your job situation isn’t stable, etc.).
• You can’t afford the monthly carrying costs of homeownership. Renting is more affordable and makes more sense in the short-term.
• You’re carrying high-interest debt. Focus on pay VISA off before buying a home. It makes little sense to borrow money for a mortgage when you’re paying 19% interest on your credit card.
When to Buy
• You’re ready to put down roots and are committed to staying in the same place for five years or longer.
• You’re ready for the responsibilities of being a homeowner. Homeownership comes with a lot more responsibility than renting.
• You’re ready to make financial sacrifices. You may not be able to afford to go on multiple trips a year when you’re a homeowner versus when you were a renter. If travel is highly important to you, you might be better off renting.
• Now, if you have plenty of money (do not pay more than 1/3rd of your income for the monthly payment used to be the rule) and want the house, can furnish it, and have extra rooms for family and guests, and can afford the utilities and the taxes, plus you want to entertain. Go for it.
• You’re ready to put down roots and are committed to staying in the same place for five years or longer.
• You’re ready for the responsibilities of being a homeowner. Homeownership comes with a lot more responsibility than renting.
• You’re ready to make financial sacrifices. You may not be able to afford to go on multiple trips a year when you’re a homeowner versus when you were a renter. If travel is highly important to you, you might be better off renting.
• Now, if you have plenty of money (do not pay more than 1/3rd of your income for the monthly payment used to be the rule) and want the house, can furnish it, and have extra rooms for family and guests, and can afford the utilities and the taxes, plus you want to entertain. Go for it.
