Some people think that paying for rent is like throwing away your money, when you can invest them in your own property. Others, however, argue that there are far better investments than owning a home, which won’t require giving up your flexibility. These 5 signs, show whether you are ready for your own place:
1. You can handle the commitment
With the convenience, owning a property also comes with a lot of extra work, like maintenance and repairs. This is why besides the financial investment, you also have to invest a lot of personal time. If you want to own a house, for example, you have to take the time and have the finances to take care of the yard and the garden. This is the reason why people often postpone owning a home, especially if it’s a house, for a later period in their lives.
2. You have saved enough for a down payment
If you can handle the commitment and you have decided to go forward with buying your own place, then the next step is clear. You have to save up for the down payment – at least 20% of the property’s value. The sooner you start saving, the better. Research different mortgage opportunities and ask your creditor to give you different offers with different down payments so that you can chose the one best suited for your needs.
3. Your budget can handle it
The mortgage is just part of the expense. You will also have to account for: taxes, insurance, maintenance and repairs as well as other homeowner’s associated fees. As a rule of thumb, these costs should add up to no more than 30% of your income. This way you will be able to live comfortably despite the costs associated with buying and owning a home and this way you could also save for emergency repairs.
4. You found a neighborhood you imagine yourself living in the next 5 years
If you are moving often, then maybe renting is your best option. Renting also has another huge advantage – this way you can “test” a certain neighborhood and decide if you really like to live there in the long term. Think in perspective whether you see yourself living in this place in the next 5 years.
5. It’s at a good price
If you find a good housing offer and you can afford the mortgage – then you could really think about the purchase. Even if at the moment you don’t really want to move, you can rent out the property and earn yourself additional income.