Home-ownership has a lot of perks, including the possibility of being a good investment, but that doesn’t mean it’s the best decision for everyone. Sometimes renting instead of buying a house is the best decision for personal or even financial reasons.
But, if you think you are ready to buy a house, don’t forget about these important considerations first.
Saving Up a Down Payment
Sure, you can sometimes get a 100% loan for the purchase of a house but the market has moved away from these in past years since the housing market crashed, and the first homes to be foreclosed were the ones financed at 100%. Usually a down payment is about 20% of the homes’ value and you finance the remaining 80% with a mortgage loan.
20% may not sound like a lot, but depending on the cost of the house you want to buy, it can be actually take quite a bit of cash to make a down payment.
Location, Location, Location
It’s amazing how much the location of the property you are going to buy can make a difference in whether or not you are ready to buy a house. Part of this is because the price of properties can vary widely in different areas. It’s always a good idea to do some shopping around to decide what area you want to live and work in before you buy a house. Lend Lease have houses for sale in Melbourne and you can easily price compare them online with houses in other areas.
Maintenance and Repairs
Another one of the most costly things about being a homeowner is maintenance and repairs. When you rent a home, the landlord is responsible for at least most of the repairs and maintenance of the property, but when you are a homeowner you have to take on this responsibility. A lot of house maintenance and repairs are DIY type projects, but if you don’t have the skills to do it yourself, you’ll have to spend more money to hire a professional to do it instead.
What the Future Holds
You never know what the future holds in 5 years, 10 years, or even 6 months from now. You might have a very solid 5 year plan, but that doesn’t mean life will work out that way. One nice thing about renting is that you can pick up and move much more quickly than if you are a homeowner who has to put their house on the market and find a buyer.
Plus, if you don’t plan on living a house for at least 3 years (or more depending on the source), it’s usually not worth it to buy a house because of the money you’ll lose in closing costs and other fees. In these types of situations renting is probably best.
The decision between renting and buying, and when you are actually ready to buy a house, is a tough one. There are many factors to consider in this life-altering decision and these are just some of them.