Buying a property is a significant decision and a life dream for everyone. At the same time, it is a doubtful question whether to buy or rent, and it can affect financial health, lifestyle, and personal goals. A rational mindset will consider various factors and personal & financial goals before buying or renting a property.
The majority of millennials prefer to buy a property rather than rent it. Buying a property also performs as an investment. A survey by CBRE said that 71% of millennials and 60% of GenZ are counting on purchasing a property in the next two years.
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Let's look into the factor which is deciding factors for such questions:
Financial Situation: The current financial situation is one of the most critical factors before deciding. Calculate the affordability of the upfront costs of buying a property, such as a down payment, closing costs, and costs of homeownership, such as property taxes, insurance, maintenance, and repairs. Compare the costs of renting versus buying to see which is more affordable for you.
Long-Term Goals: Knowing the plan to stay in the same area or city for a long time is vital to consider. Buying a property may be a good investment. However, renting may be a better option if you plan to move around frequently.
Family Home: This is one of the most ignored deciding factors. Buying the property can be postponed if you have a family-owned house in your hometown or city. Yet buying a home becomes a priority if it is the family's first property.
Flexibility: Renting gives you more flexibility to move around. If you need to move to a new city or state, you can notify your landlord and move out. However, selling a property can take time and may be more difficult if you own a property.
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Another factor to consider is the state of the housing market. If property values are high and interest rates are low, it may be an excellent time to buy. However, if property values are low and interest rates are high, it may be a better time to rent.
Personal Circumstances: Your personal circumstances also play a role in deciding whether to buy or rent. For example, buying a property may be the better option if you have a family and need more space. However, renting may be more affordable and convenient if you are single and only need a little space.
Lifestyle: Your lifestyle also influences deciding whether to buy or rent. Buying a property may be the better option if you value stability and the ability to make a space your own. However, renting may be a more convenient option if you value flexibility.
Millennials are looking forward to buying a house. Everyone has their reasons, but your confusion on whether to buy or rent a house property should not be dependent on a report stating what others are doing. It should be based on what your current financial situation advises you to do and what other crucial financial objectives are pending.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com