To rent or to buy? That’s the question that almost every adult will ask themselves at one point or another. At my previous place, the best thing about it was “Sam”. Burst lightbulb? Call Sam. Kitchen taps need fixing? Call Sam. Now that I’m a homeowner, there is no more “Sam”.

So before you answer the question of buying or renting, here are some other questions you should ask yourself first.

Is it important that your house is an investment?

If it's very important, you might want to rethink your future living arrangements. A home is not a guaranteed source of income. There are many factors that play towards a home’s worth such as the location, the neighbourhood, the management, and even the facilities provided. A great deal of planning is required to find that perfect investment property, and let’s not get started on finding the perfect renter. When you choose to sell the house after 5 years, all these factors would have contributed to the final selling price at the end of the day.

Have you crunched all the numbers?

The biggest mistake future homebuyers make is comparing a month's rent to a month's mortgage payment. When it comes to purchasing your own house, there are many additional fees you need to include to make a fair comparison: the principal interest, property taxes, property insurance, homeowners association fees and maintenance.

The maintenance, in particular, can't be underestimated. If your wiring goes wrong or a pipe leaks, you have to fix it yourself or hire a professional, and there are other ancillary costs as well. It all adds up.

Can you handle the stress?

Most people weigh the financial aspects of buying versus renting, as they should, since it's the biggest financial decision most people will make, but one big factor to consider when buying a home is stress. Stress overload can lead to missed payments, which can result in destroyed credit or even losing the home. It's better to rent if your life is in flux, and then buy when your stress levels are lower.

How old are you?

If you're in your 20s or even your early 30s, there are a few arguments for not buying a house. It’s not regarding responsibility, but you’re young and life is uncertain. There might be opportunities you would like to take, that require the financial and social flexibility that disappears with home ownership. If you have a house, however, you may find that life can't take you to all that many interesting places.

So what’s the answer to whether it’s smarter to rent to buy? Weigh in on all the points above. If you feel that even after you’ve crunched the numbers and proceeded with the purchase, that you’re still in a comfortable, stress free, financial situation, go ahead and make that purchase. If any of those points strike you with a big red mental “NO”, you’re probably better of renting.


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