Should You Buy or Rent When Moving to A New City?

This is a question that has been asked multiple times by people who intend to move. There are arguments for rent and there are those that swear by buying a house. A third opinion is that both have their merits.

Why is this topic so important though? It is important because the decision will affect everything that follows it. It will affect financial health, it will affect the stability of the family, the ability to invest in other things, and even major goals in life. For as long as people relocate, this question will always be asked.

Although there is a division on what is best for the next step of your life, the answer might lie in a completely different area.

Moving and The Decision You Must Make

Moving is an act of changing a place of abode by an individual or a group of individuals. It is also called relocation, although, moving has become the more common term.

What happens in relocation is a change of dwelling and it can be to another location in the same building. It can also mean moving to another country.

Humans move and always have but there has never been a more convenient way to change location like there is today. In 2020, a year with a pandemic that changed the course of history and everyone’s lives, almost 9 million people changed their address. This is higher than in 2019 when there was no pandemic. There can be many theories as to what this means but one theory that cannot be ignored is that a pandemic couldn’t stop people from changing where they live.

Changing where you or your family live, means you need to have where to move to. This is where the question about renting or buying a house comes in. No matter the method or distance of the move being made, a choice of where to live needs to be made before the move begins.

No one can avoid the choice of where and how to live when moving because what would relocation mean if there was nowhere to stay at the destination?

Should You Rent?

Why should you rent a place to live and not buy one? Renting has existed for a long time and it doesn’t seem it will go away any time soon.

There is a notion that certain people hold towards paying rent. They see it as a waste of money. They see it as financing the housing dreams of another. If we look critically at this theory, we might realize that we finance the dreams of people with or without paying rent.

However, the answer might not lie in this being true or false. It might lie in the difference between individuals and how they view life.

For some, it will always be a waste of money because their dream is house ownership while for others it will be proper investment in their convenience and opportunities to do other things.

Renting was in the past, viewed as the first step to the inevitable owning of property. That isn’t the case anymore as more people are choosing to rent as a dream lifestyle.

Advantages of Renting

Like many things in life, renting has its advantages. There are aspects of the venture that just can’t be beaten by homeownership. These advantages are the reasons why renters have increased by 16.4 million over ten years.

The first advantage is the absence of maintenance costs. If a portion of your rented home or apartment gets damaged or spoils, you aren’t expected to repair it. It is the landlord’s responsibility. If you were to be a homeowner, on the other hand, you would have to repair it yourself. This means homeowners will spend money fixing their homes while renters won’t.

The second advantage is also financial. There is no down payment for rent. Homeowners know the toll down payment takes on their finances. Imagine a home whose market value is $250,000. A 20% down payment will be $50,000 which is entering the annual income territory. So, renting has the advantage of not having down payments. The monthly payments of rent are not up to $5000 a month in the most expensive neighborhoods.

Another advantage is that renters get access to amenities that homeowners will find expensive to install and maintain. Amenities like indoor pools and minibars are available in high-class apartments and it is all-inclusive in the rent money.

Finally, renters have more location-based freedom. Homeowners can only live in places where they can afford but renters can find homes for various income levels in the major cities or the suburbs. Also, if someone paying rent wants to relocate for personal reasons, they easily can, unlike homeowners who will feel more glued to their current locations.

Disadvantages of Renting

The disadvantages of renting are the reasons most people take the plunge into ownership of property. These reasons are also the reason why there will be population growth in suburbs.

The first disadvantage is uncertainty. When a person pays rent, there are a lot of things that can lead to the loss of that space. The landlord could give you a 30-day notice for an infringement no matter how small it is. The cost of rent could increase to the level you cannot afford and you will be forced to move out. There could be job loss as well which will lead to house loss. Homeowners don’t have these challenges as long as they don’t default on their mortgage because the house is theirs.

The next disadvantage is the lack of a sense of ownership. In rent, you don’t own the property and this stifles the level to which you can personalize your apartment. You cannot do things like renovating the bathroom to your taste. Homeowners can put their personalities into their houses and style them as they see fit.

The final disadvantage of renting is the lack of equity. When paying rent, you aren’t investing in a venture that might give you big returns in the future. Homeowners, who bought homes in growing locations, are making long-term investments with big returns in the future.

Should You Buy a House?

If you ask many members of Gen X, you will be told that owning a home is the best thing you can do for your finances.

Home owning has a poster for the ‘American Dream’. It has been shown as reaching the pinnacle of stability in one’s finances.

On the flip side, more and more millennials are seeing homeownership as tying their roots down and not having freedom. It is also being seen as entering a financial commitment that carries unnecessary risk and a very futuristic reward. Younger people are increasingly shunning home owning.

Are both sides right though? Is it possible that homeownership isn’t what both sides of the argument paint it to be?

Advantages of Owning a Home

If there were no advantages of owning a home, the culture would’ve died off by now and it would start a chain reaction that led to the government owning property and renting it out to the whole population. However, since there are advantages there are homeowners.

The first advantage of owning a home is the sheer solidity of the investment. A house is one thing that is most often increases in value. This means buying a house is synonymous with putting down the money you and your children could benefit from in years to come.

Another advantage is the freedom to live in a house you designed to your taste. You aren’t restricted to the choices of a landlord. If you want showers instead of bathtubs, you can get those. Renters don’t have that freedom.

Finally, you get incentives from the government. There are tax incentives for homeowners. They also generally get a better tax credit.

Disadvantages of Buying a House

One of the biggest disadvantages of owning a house is the high upfront cost. The upfront cost in most cases is 20% of the value of the house. The median cost of a house in the United States in 2021 is almost $380,000. This means a 20% upfront cost will be approximately $76,000. Rent doesn’t have such expenses.

Another disadvantage is that you are rooted in the home you own. You can’t just wait till the end of the month and relocate on a whim. Homeowners, unlike renters, don’t have that freedom.

Finally, homeowners have to take responsibility for maintenance costs. Renters don’t bear that burden. If something gets damaged, the owner of the house will have to fix it.

Should You Buy Or Rent A House

Concluding with the question we started with seems appropriate. Buying a house or renting a house, isn’t an easy choice based on a formula. It boils down to what you want from life, what is important to you, and what you can afford. If you can’t raise the capital for an upfront payment, renting might be a good choice. If you want to invest in the most stable market in the country, homeownership is the way to do it.

So, should you buy or rent a house? The answer is yours to make. However, while you decide, make this straightforward choice of contacting Three Movers for your next move. Whether you buy a home or rent an apartment, we will move your stuff to it.