Whether you are a new member of the military, have been actively serving for a while, a veteran or a military spouse, making the decision to rent or buy a home can be daunting. There are many things to consider and questions you may have such as “How much will I need to rent a home or an apartment?”, “Will I need to pay for the first month’s rent, last month’s rent and security deposit upfront?”, “Will I need to pay a fee for my pet?”, “Should I have renters insurance?”.
And, if you are considering buying a home, “Is my credit in good standing?”, “Can I afford the mortgage payments?”, “What are the property values in the area I’m considering buying?”, “Can I afford appliance, electrical and plumbing repairs?”, “How much will my homeowners insurance be?”.
There are numerous resources that will give answers to your questions and ultimately help you make the decision to rent or buy. Many financial experts say that before you make a decision whether to rent or buy, you will need to assess your current financial status and examine your spending and saving habits. Young military members have the advantage of creating and developing healthy money management habits early.
Money management experts say the best habit to develop is to save, save, save, and to start saving when you are young. Deciding to have fun now and put off saving until later on, causes a lot of financial burden for people and it’s hard to turn it around. Making good financial decisions from the start and being consistent with those decisions over time will make for a more secure financial future.
In an article written by Aarti Shahani, “Forget Generation Rent: More Younger Americans Aim to Buy”, according to housing experts, you should spend no more than 28% of your gross pretax income on a monthly housing payment. The article also says that your combined debt (housing expenses, credit cards, student loans, alimony, car loans, etc.) should be between 30% and 40% of your pretax income.
If you need help figuring out if you can afford to rent or buy, a great resource to use are online rent-or-buy calculators. Two sites offering these calculators are mentioned in Aarti Shahani’s article referred to above. One is offered by Trulia and the other is offered by Up-Shot. Links to both calculators are listed below.
There are numerous resources that can assist you in your final rent or buy decision. Talk to people who rent and those who have purchased a home and read current articles on home buying and renting. Educating yourself as much as possible will bring you that much closer to making the choice that is right for you.
For further details and current information on whether to rent or buy, visit the following:
- “Forget Generation Rent: More Younger Americans Aim to Buy” by Aarti Shahani at NPR (National Public Radio), March 24, 206 at NPR.org.
- Renters’ Insurance Can Protect Tenants in Range of Situations by Ryan Bentley, April 18, 2016 at PetoskeyNews.com.
- Trulia Buy/Rent Calculator
- Up-Shot Buy/Rent Calculator