If somebody asks me: “Should I buy a house?”
And my answer is always the same: “I have no idea.”
It is not for lack of familiarity with price-to-rent ratios or the benefits of the mortgage interest deduction. No matter how carefully and clearheadedly you approach the exercise, is more a starting point than a conclusion about your optimal living situation. It will give you a good look at the financial dimensions of your decision. But housing is about quite a bit more.
These are the 5 questions that one should answer before taking a call:
- How much is permanence worth to you?
One of the nonfinancial benefits of buying a home is that you know you can live in it indefinitely. You don’t have to worry that the landlord will raise your rent 20 percent, or demolish the building to turn it into something else. You can renovate the kitchen or paint the shutters according to your preference and yours alone. (O.K., maybe a historic preservation board or homeowners association may have some say, but you are pretty much on your own).
So what is that worth to you? It is purely a question of your preferences and priorities in life. Continue reading “Renting house v/s buying house”