The question of whether or not someone should rent or buy a house often discussed. Type that question into Google and you'll see hundreds of videos from hundreds of different people, each giving you their perspectives about whether you should BUY TODAY or RENT FOREVER! So, what exactly is the answer? How does one find the true method throughout all of the possible answers out there? The truth is: there is no best answer. Whether or not you should rent or buy a house depends entirely on the individual asking the question. Whether you should rent or buy is a question that only YOU can answer. However, there are certainly different perspectives one can consider that will help them develop a concrete answer. My primary suggestion: Determine your 5-year plan? Are you planning to start a business?
Do you have a job that you love that you plan on being in for the next 5-50 years? Are you just unsure of where you want to be in the next few months or year? What kind of lifestyle do you want to live? These are all questions that, based on your answer, will heavily impact your decision to buy or rent. For example, my personal 5-year plan involves me investing in my business. For me, liquidity (money that I can spend immediately) is necessary because my objectives require me to spend money on the front-end in order to make money on the back-end. For this reason, I choose to rent instead of focus on buying. If I were to buy a house, I'd need to save up for a hefty down payment and use most of my money to pay down the mortgage of the house (which for the first few years will be primarily the Interest). Effectively, all of my money would be tied up trying to rent and save for the home purchase. Then, once I'm in the house, a big chunk of my money would need to go into the house. However, I have friends who are in a career and have no plans to move or start a new job at a different location. They prefer security and their long-term plan involves settling in one place and starting a family. For them, buying a house is a perfect idea from a long-term perspective. They'll build equity and (hopefully) purchase a home in an upcoming area that will appreciate well. Plus, their money will be placed in a more secure area. Overall, whether you should buy or sell a house comes down significantly to your long term goals relative to where you'd like to be financially.
In the video shared in this article (right above), I give a rough breakdown of what it could cost you to rent vs. buy and, as you'll see, it could cost you over $100,000 to rent if you're currently in a stable job position but choose not to buy. However, for someone like me that isn't seeking security and might move frequently or is in need of liquidity, $100,000 is much better off being spent on investments that could offer a return rather than placed into a house which would take longer to see a return (financially speaking). Again, it's important to be mindful of the short term vs. long term rewards and how it will impact you. If you're curious to know what you should do, I encourage you to schedule a time with me so that we can plug in numbers corresponding to your area and situation and see whether or not you should buy or rent. I always encourage anyone thinking about buying a house to consider a long-term strategy. You need to have a strategy when it comes to how you'll buy a house and you need a strategy when it comes to how your house will serve you.