Why People Think Options Are A Good Idea

Making a Choice on Whether to Rent or Buy a Home

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. 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.

First way to tell what is better, to rent or to buy, is to find out the P/R ratio or called price-to-rent ratio. The number that you will get from this ratio will give you more or less an idea whether the homes in your interested area are fairly priced. 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. According to experts, the higher the P/R ratio of 20 means it is better to rent than to buy the property in that 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.

A certain magazine has a rent versus buy calculator that can help you in your decision on what is best for you. In the end, planning to own a home should be grounded on the reality of your financial capability and not on what others would choose for 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.