Owning a home is a big part of the American dream, but it’s not necessarily right for everyone at every stage of life.
That’s why it’s important to take a careful look at your financial picture before you make a decision about whether to buy or rent a residence.
Pros and cons
The upside to buying a home may be overstated. Tax benefits of home owning don’t extend to everyone. You have to itemize to your taxes to get a write off, which many people do not or cannot.
Owning a home can be an excellent investment over the long term, however, especially when mortgage interest rates are low. And having your own house does give you a greater level of control over your environment, both where you live and what you can do to remodel your house.
Do the math
Online calculators at real estate and financial websites can help you determine if you’re financially ready for home ownership, but you should be secure in other aspects of your life as well. Renting may be a better choice if you:
- have a lot of debt
- may have to relocate frequently
- have an unsettled personal life
- are not sure where you want to live
Make a plan
If you really want to own a home but just can’t afford it yet, use this time to get your affairs in order by paying down your debt and saving up for a down payment. You can also check out other purchase options that may be easier on your budget, such as rent-to-own houses, short sales and distressed homes.