Deciding to Rent or Buy

Even if you fit the qualifications for a good rent-to-own candidate, there is still the question of whether you should be renting or buying in the first place. There are many aspects that you should consider when answering this, both financial and personal.

Let’s talk about the personal side first. How stable is your living situation? Are you planning on living in the same area for a number of years? Do you know how many bedrooms and bathrooms you will need for the foreseeable future? Do you know exactly what you want in a home? (e.g., do you need a yard? Do the school districts matter? Etc.)

If you plan on being in the area for a long time, know exactly the size of house you need and know exactly what you need in a house, then buying could be a consideration. However, if you’re unsure about any of the above answers, you are probably best renting until you figure out your personal situation. If you're interested in finding apartments for rent in your area, we recommend

Now that you’ve answered the personal questions, the big consideration is financial, and whether you are financially better off by renting or buying. The big trade-off that needs to be considered is between the rental rate, the mortgage rate and the expected increase in both.

While it can be very complicated to figure this out, there are a few general rules that can help point you in one direction or the other. You should consider buying when: 1) Your Mortgage payment will be less than your rent payment, 2) Home prices are rising quickly, 3) Rents are rising quickly and 4) Mortgage rates are low.

You should consider renting when: 1) Mortgage payments are significantly higher than rental payments, 2) Home prices are flat or declining, 3) Rents are controlled or rising slowly, 4) Mortgage rates are high.

The New York Times has an excellent “rent or buy calculator” that can aid in your decision making process. We highly recommend that you use it while considering all these factors.

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