5 Takeaways That I Learned About Options

Making a Choice on Whether to Rent or Buy a Home

Homeowners have experienced and can fairly say that there are pros and cons between renting and 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. However, the maintenance costs in owning the property will prove to be significantly greater than renting the house because of the costs like taxes, insurance, maintenance, and others related to the ownership of the property, like if you are 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.

One criteria for you to find out to help you decide whether to buy or rent is to check the price-to-rent ration or called P/R ratio. From this number out of the ratio computed will give you an idea on how the homes in that area are fairly valued. The computation of this ratio is first you look for two similar units, where one is for sale and one is for rent, and divide the sale of the for sale unit to the yearly rent of the unit for rental, and the resulting number after your division is the P/R ratio. An expert said that if the computed ratio would result to higher than 20, then it is advisable to rent the property rather than buy it. The P/R ratio is not widely available, and so for the particular area you are interested to dwell, it is better to refer to the real estate agent of the area.

Your next pointer in gauging the cost of the housing in the place you are interested is to make a comparison with it to your family’s income. If you find out that the housing in that area is overpriced against your income, then you have the option to think twice in purchasing the property.

A certain magazine has a rent versus buy calculator that can help you in your decision on what is best for you. 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. Depending on where you want your family to settle or where your work will take you and your family, you can already start to compare the housing costs in that area against the possible income you will get if you settle there.

Reference: http://sandcastlesandpapercrowns.com.au/