When to Consider Renting Instead of Buying

Conventional real estate wisdom says that you should plan to stay in one location for at least five years if intending to buy a single-family home, condo or townhouse. One reason for this is to allow time to pass for enough equity to be built into the property to cover the costs associated with the purchase. Of course, market conditions can drastically affect how long this actually takes, for better or for worse, as can the type of financing applied. Below is a quick explanation of a few common situations why renting would be the most sensible housing option.

Just Out of School

Though real estate is universally regarded as a smart investment, there are times when putting money towards paying off debt is a more sound financial strategy than making a mortgage payment. In the first years after college this is likely the case. Student loans and credit card debt are often the case, and any equity that can be built through home ownership will probably not offset finance charges and the possible penalties that may result from an unduly strained budget. It also bears considering that at the early stages in a career, you will ordinarily be earning significantly less than you will in a few years, which means the properties you will be able to afford now will be fewer, than if you wait awhile.

“A Rolling Stone Gathers No Moss”
Buying a home is a commitment to time and place, as well as a financial one. Putting down roots is generally regarded as a good thing, but not if it reduces one’s ability to be flexible enough to take advantage of professional opportunities as they present themselves. Renting makes for easier decisions about relocations that are work related. And then there’s the possibility that two households will need to be combined….

Poor Credit

Credit scores are almost entirely dependant upon one’s ability to pay their mortgage. For some people, poor fiscal discipline and living beyond their means results in a debt burden that simply does not allow for a bank to issue a house loan. But this is not always the cause of a poor credit score. Every day jobs are lost through no fault of the individual, business decisions don’t pan out as anticipated, and personal relationships are redefined. All these scenarios can result in a dramatically overtaxed budget and an inability to make a regular monthly mortgage payment.

“It Is Always Darkest Before the Dawn”
During these transitional points in life, the rental option is many times more appropriate. One of its main benefits is that it keeps the prohibitively high interest rate that would be required to take out additional bank loans from compounding credit troubles. Managing a budget in such a way that steady progress is made towards paying off existing debt is the best strategy for repairing poor credit. Renting works doubly towards this end by virtue of both lowering monthly expenditures and exhibiting financial responsibility.

New Job

When accepting a new positionin the greater Houston area, it is sometimes necessary to relocate in a short amount of time. Finding the best home under these circumstances can be very challenging, if for no other reason than the fact that you will have no routines established to evaluate which location will work best for your lifestyle. Renting allows you to get familiar with neighborhoods, commute routes, schools and amenities.

“Hope for the Best – Plan for the Worst”
We all want the changes that invariably come about in our lives to have a positive impact, but unfortunately that is not always the case. If an employment situation turns out to be less than ideal, any difficulties are likely to be further complicated if a mortgage is part of the equation. In such instances breaking a lease is without question less costly than having to turn around and sell a home shortly after moving in.

Contact us , your Houston Realtor to arrange a meeting to discuss your many options. The Zoller Group is knowledgeable of Houston’s rental market and is happy to assist you in finding the best property for your circumstance. To learn more, read the article “Why Use The Zoller Group to Help Find a Rental.”