One ongoing debate among millennials and other generations is whether to rent or buy a home. From a short-term perspective, renting makes a lot of sense. It requires a lower capital investment, may prove cheaper on a monthly basis and renters can outsource problems back to the landlord.
Buying may prove more expensive in the short-term, but it allows homeowners to build their own equity, instead of someone else’s. To add to this, homeowners have more control over their properties than renters do.
Where it is cheaper to buy
The logic that it is cheaper to rent does not hold true in all markets. For instance, in Jacksonville, Florida, it is almost always cheaper to buy a home than to rent one. According to Business Insider, homeowners paid an average of $1,137 for monthly mortgages. In contrast, renters paid about $1,259 per month to landlords.
CNBC also identifies Jacksonville, Florida, as a city where buying is cheaper than renting. Another Florida city on its list is Tampa. These are two desirable cities for living, in Florida, so this is great news for buyers, whether they want to purchase a personal home or investment property.
How to determine when to buy
In some markets, there is barely a difference between renting and buying. In these markets, potential buyers may wonder whether it makes sense to own or rent. These are some factors to consider:
- Whether the individual or family plans to remain in the area for at least two to five years
- Whether the buyer is in a financial situation to qualify for a mortgage
- Whether the buyer feels ready to take on homeownership responsibilities
- Whether the market currently favors buyers and if the buyer feels willing to wait for a change
- Whether building equity is a top priority for the potential buyer
There is no one answer that suits every goal and financial situation when it comes to the question of buying or renting. However, as housing prices continue to increase, more people may feel compelled to rent.