Some Facts Between Renting or Buying an Apartment From experience, people have realized that there are pros and cons in renting a home and in owning a home. One big disadvantage for example when you rent a unit is how close your neighbours are, to the point of hearing their shouts and footsteps. Some will […]
Some Facts Between Renting or Buying an Apartment
From experience, people have realized that there are pros and cons in renting a home and in owning a home. One big disadvantage for example when you rent a unit is how close your neighbours are, to the point of hearing their shouts and footsteps.
Some will find buying a home a smart financial decision because it gives you stability and freedom to do whatever you like with your place. On the other hand, owning a home may prove to be not the best action also for some because of the maintenance, taxes, insurance and others that would cost more than renting, like in some places in the Pacific Northwest.
Therefore, on the assumption that you are to make a decision based on your financial condition whether to rent or buy your place, there are some ideas to help you stay objective in your decision.
Your first guide is to check the price-to-rent ratio or P/R ratio, that will aid you in deciding whether to rent or buy your house. This number that you figured out from the P/R ratio will give you a rough idea of the pricing placed on the homes in the area you are interested. You can get the ratio number by first get two similar houses or condos, where one is for sale and the other is for rent, and divide the sale of the one to the yearly rental of the other, and the resulting number after you divide is your P/R ratio. One expert says that if you get a ratio of higher than 20, it is better to rent than to buy the unit in that particular area. There is no available P/R ratio always in your interested area, and so it is best to contact a real estate agent to consult the matter.
Another means to tell the cost of housing in the area you are planning to settle is to compare it to the income of your family. You will find that some housing may be overpriced in that particular area and you might not be comfortable living there given your income.
There is also a rent versus calculator that can help you decide what to do and this information you can get from magazine source. In general, your plan of owning a house should be grounded on the reality of your financial situation and not based on what others will tell you. Others would look at their earnings in the particular area where they plan to work and settle against the housing costs of the area, and the information will help them decide whether to rent or buy for now.