It’s one of the most common tropes in this country – the “American Dream.” For millions of Americans, that dream entails stability and comfort: getting married and having a family, having a stable and well-paying job, and owning a home. But for millions of other Americans, owning property, whether it’s a smaller condo or larger home with a backyard, is not ideal for a variety of reasons.
According to RealyTrac, between 2007 and 2014, roughly 7.3 million homeowners lost their homes due to the Great Recession. Thus, it comes as little surprise that the ownership rate has fallen to 63.7 at the beginning of 2015, according to The Washington Post, and much of that has to do with caution being exercised before signing the paperwork, or an otherwise disinterest for economic or flexibility reasons.
However, all this aside, homeownership can be rewarding, both in terms of having assets and having the freedom to do what you choose with your home. Here are a few things to consider when choosing between being a renter and being a homeowner:
Think about your current life and your short-term future. What kind of lifestyle do you have? Are you married or in a partnership? Do you have children? Do you have a career that will keep you in your current area? These are all questions to ask yourself before taking the homeownership plunge. If you’re looking to stay where you are for at least the next five years, and you have enough saved for a down payment, homeownership might be beneficial for you.
Look into the small details. When you’re looking into moving a new residence, you’re not just changing buildings – your surroundings and neighborhood are also a part of your home. If you want to live in a more populated and urban area, renting is often a smarter choice because of the cost of owning a home in such areas. If you’re into something quieter, or if you want to raise your children in a more suburban neighborhood, owning a home tends to be a more popular choice.
Make sure you’re prepared. Once you’ve chosen between renting and owning a home, take the necessary steps to prepare financially. Check your credit score and history in advance, as it can limit your options if you have a lower score. If you’re renting, make sure to get rental insurance. If you’re looking to buy, look into pre-approved financing for a more streamlined closing process.